A hidden gem
18 August 2023
Liza Helps turns roving reporter, tracking down a stunning 130,000 sq ft facility that punches well above its weight in terms of sustainability and worker friendliness.
AN UNPREPOSSESSING industrial estate in the north west hides a hidden gem and quite possibly a blueprint on how to literally turn a sow’s ear into a silk purse – well maybe I can’t stretch it that far as the bones of the building were always there having been intended as a warehouse production facility rather than call centre in the first place, but it’s pretty close.
This 25 year old ex-British Telecom call centre has now been transformed into the latest carbon-neutral-in-operation Grade A logistics hub offering in the region.
It may not be the biggest, at just under 130,000 sq ft in total, but it certainly does not pull the punches. The specification of investment manager CBRE IM’s Solar 120 on Europa Boulevard in Warrington, with its catalogue of environmental and wellness offerings reads like a logistics company’s Christmas and birthday wish list rolled into one. So, it’s not surprising to hear that it’s under offer just two weeks post practical completion.
But when I visited, back in May, for the launch of the facility, there was all to play for. From the outside I was hard pushed to date the property, with clean lines and smart cladding, 20 EVs in evidence and well maintained landscaping – nothing screams late 1990s, when it was originally built.
While the two storey 9,000 sq ft offices, which wrap round one corner of the building, certainly don’t have the ubiquitous floor to ceiling glazing of many a modern Grade A space, the double height entrance is impressive and fit out throughout is understated giving off quiet comfortable corporate vibes.
This contrasts with the main hub of the building, a practical, surprisingly light, 120,511 sq ft warehouse space with 10.1 m eaves boasting 10 dock and two level access loading doors serviced by a 37.5m yard with space to park 18 HGVs and 88 cars.
It is hard to picture the property as a bustling call centre, but I am reliably informed that it was, with a suspended floor some 1.5 meters above the expanse of level concrete I see before me.
I am told that when the company investigated the building prior to its acquisition short straws were drawn as to who would have to crawl under the suspended office floor to check out the state of the concrete beneath to check how good it was and whether they'd have to completely redo it. I can’t imagine that was an easy or comfortable task.
Rob Trevor, logistics customer experience lead EMEA, CBRE Investment Management EMEA
Luckily for CBREIM, apart from a few scratches and dinks where the call centre floor was supported, the original warehouse base was in excellent condition after a quarter of a century hidden away.
CBRE IM could have quite easily knocked down the building and rebuilt on the 8.5 acre-site but associate director Joe Russell says: “It was far more sustainable to refurbish - c 25 kg per m2 carbon in refurbishment compared to 500 kg per m2 in new build. Effectively we have not had to build a new concrete slab, yard, carpark, or steel frame and cladding. Additionally, it made financial sense.”
The cost of the refurbishment has not been revealed but it could not have come cheap. There were some major structural challenges specific to the building that needed to be overcome.
There were issues with the ring beam support which holds up the slab in the warehouse where the docks were to be installed so an innovative portal frame support system needed to be used.
In addition, says Russell: “The solar technology at this scale was a learning curve for the consultants and for us, trying to anticipate occupier requirements today and in the future.”
The photovoltaic array which spans 85% of the roof provides an extra 700KvA of power in addition to the 1.6 MvA which is already on tap.
Keeping with the mantra reuse, retain and recycle, none of the operational waste generated by the refurbishment was sent to landfill. Each and every part of the project has been thoroughly interrogated allowing the facility to be awarded BREEAM Excellent with an EPC A+ rating. It will be able to be operated to net zero. And if that were all it would still cover everything you could want in a modern day logistics facility.
But CBRE IM went further. It incorporated a Multi-Use Games Area outside as well as landscaped seating areas and walkways all around the property for both warehouse and office employees to share and enjoy.
During the launch speeches it was mentioned that for many warehouse workers there is nowhere to go during their short 30-45 minute breaks and usually what is on offer leaves a lot to be desired.
While the provision of MUGAs has been done before it is rare on a facility of this size. Senior director logistics customer experience Rob Trevor says: “This is probably the lower size range for a MUGA, but there is no reason why high quality outdoor break space cannot be incorporated [in any refurbishment or development] such as outdoor gym’s, gardens and seating.”
Complementing the MUGA and the onsite cycle store there are also showers not just within the main building but also adjacent to the MUGA allowing employees - should the new occupier allow - access to the facilities outside working hours. It’s the small details.
Bat boxes, bee hives and shelters for hedgehogs are also part of the whole picture.
I catch up with Black Cat Building Consultancy director Brett Lee, just before he plays a contractors vs CBRE IM five-a-side football match celebrating the end of the launch, asking him about the refurbishment: “This has been built best in class to be a Gold standard which no doubt in five years will be just the standard - such is the way that the industry is continuously improving.”
Although he says that off-handedly, you can see he’s justifiably proud at what has been achieved with this particular building.
And it is something other landlords, investors, occupiers, and developers will have to consider seriously in the not too distant future as well.
A report by Knight Frank this month notes that approximately 128 million sq ft of UK warehouse space - 18% of all units above 50,000 sq ft - will fail to meet minimum Environmental Performance Certificate (EPC) requirements set out by Government by 2027 and risk becoming unlettable. This number triples to 404 million sq ft, or 60% of warehouse space, when considering the minimum EPC B requirement by 2030.
“It is not surprising,” says Knight Frank head of logistics and industrial Charles Binks,: “that occupier demand is becoming increasingly focused on high-quality facilities that can offer ESG credentials. Operators are increasingly discounting facilities that do not fit with their, or their customers’, sustainability strategies. While newly constructed warehouses generally meet top sustainability standards, 82% of the UK’s existing stock built before the year 2000, does not meet minimum EPC requirements.
“It is obvious that significant capital expenditure is required to retrofit [and refurbish] these warehouses and mitigate obsolescence risk, however just 6% have undergone upgrades in the past five years. The prospects for rental growth should offer incentive. However, investors must accelerate the rate at which older facilities are upgraded or they will become obsolete.”
This was just a part of the many reasons behind the consideration to refurbish Solar 120 but the core driver Trevor notes: “was our corporate and own personal commitments to ESG, it was the right thing to do.
“This is far more than a just a “tick box” exercise, it’s an evolution of asset management strategy to deliver the best assets in specification and ESG because this is what our customers (tenants and investors) are now demanding.
“The solar technology at this scale was a learning curve for the consultants and for us, trying to anticipate occupier requirements today and in the future.”
“We are continually improving our refurbishment standards in every sector - logistics is no different. We have almost a new build rent for the completed building [Solar 120] so we see this as justified as our fund will hit its target return. We have also reduced the void period as the building is now under offer only two weeks post PC.
“The rationale is to create buildings, not just for today’s market, but the future. Buildings that will stand the test of time and still be of a standard that occupiers in the future demand. The trend for better quality buildings is gathering pace across all sectors.
“We believe that ESG and performance do align, and it is likely that the best ESG-specified assets will outperform in the long term. Short-term green premium, longer term avoiding the brown discount. Longer term having this level of specification will likely be the norm for institutional assets and therefore anything less than that will be deemed secondary.”
ECS-Building Services Consultants, John Turner Construction alongside Black Cat Building Consultancy carried out the refurbishment with Harlex acting as development manager. Joint letting agents were B8 Real Estate, Moriarty. & Co and Gerald Eve.
Solar 120 is located between junctions 8 & 9 of the M62 to the north of Warrington within Gemini Business Park.