MEPH Opportunities in Shopping Centres by Director Michael Gribben

xburo do a lot more than design; with an unparalleled commercial awareness of Mechanical Electrical and Public Health (MEPH) matters which protects funds, developers and organisations that work in the commercial real estate sector.

At xburo, we have completed numerous retail centre projects in the last 18 months. These includes fit-out designs, common area upgrade designs, dilapidations, and also technical due diligence (TDD).

When carrying out TDD reporting, there are a number of considerations which purchasers and vendors consider now in the aftermath of covid-19 pandemic and associated lockdowns.

Many owners have seen larger retailers such as Debenhams vanish from the market, often in places where they were anchor tenants that would drive footfall. This has put extra pressure on the owners to operate as lean as possible across all aspects of their business at a time when the energy crisis has costs rising at an alarming rate.

Often overlooked, the MEPH teams can contribute to a lean operation and ensure compliance obligations which owners have to maintain.

This also presents opportunities. The ambition amongst many building owners, not just shopping centre owners, is to become more sustainable across operations, save money and boost their carbon profile.

As part of the TDD inspection process, xburo is completing carbon assessments and renewable energy appraisals for future operators. As renewable technologies become more efficient and affordable, the cost of energy gets higher, the payback periods get shorter, and the case for renewables becomes more evident.

Shopping centres often have 2 key attributes that can make the renewable energy options more attractive, for example:

1. Large roof spaces
2. Large electrical capacities

These 2 considerable items can often make or break projects from the outset, where roof space is limited and where access to solid grid connections are missing.

In recent months, the drive to be as energy efficient and independent as possible has taken more of a priority and it now sits front and centre of the appraisal process. xburo is leading this in recent transactions for investors as well as industrial and commercial acquisitions, as part of the TDD process. It is an evolving time for our industry which can combine numerous skills from the likes of IES energy modelling, thermal modelling etc. that can maximise the knowledge that we pass to our clients and minimise their risk.

Using the large roof spaces for solar PV applications should be straight forward, large open areas, often with suitable structural members allow a quick deployment of the technology and then allows the operator to start offsetting some of their operational energy costs, which can often be significant. In recent projects, we are seeing payback periods for large scale systems, with large scale investment, at 3 years!

We have yet to identify a suitable application that warrants exporting energy back to the grid as we are seeing items such as battery storage systems for electric vehicle charging installations and using as much generated energy as possible within the centre or building.

Engagements with district network operators on the grid appear to be becoming easier and swifter as is the planning department engagement within local authorities which also de risks projects and encourages development in renewables and energy efficiency projects.

Developing a renewable energy solution within a broader sustainability strategy should also include other energy saving features such as LED lighting throughout, variable speed drives on motors and Air Handling Units (AHUs, in particular, that heat recovery systems are working effectively and ideally utility providers are supplying from a green tariff.

Ultimately,  there are often large spaces to heat or cool, ventilate, light and power and it is important that owners find the right balance of energy use and spending with their compliance obligations. In a number of scenarios, it is becoming evident that energy saving strategies, engaged during Covid, are becoming more “permanent” solutions. Often air handling units are turned off to prevent the energy usage and ultimately cost associated with their operation. However, this is in direct conflict with the obligation to provide fresh air to large volume spaces, such as shopping centres and entrance lobbies. It is important that this vital service is brought back into service and there is nothing to stop this becoming part of the broad sustainability strategy.

A wise person once told me that the key to successful project delivery is to appraise, appraise and appraise until you have rid yourself as far as possible of the unknowns to eliminate or minimise your risk. Great advice that we take into every project, transaction, or task to give our clients the best service we can.