British Land Triton Square e1637683732755

How do FTSE 100 REITs approach tech and sustainability?

Landsec has “raised the bar” on ambitious carbon targets, CEO Mark Allan said in the developer’s latest annual report. But what do the latest annual results from Landsec and fellow FTSE 100 developer British Land reveal about their progress?

Both landlords have published their full year results to the end of March 2022. Although much of the focus has been on the rebound in their financial position, post-lockdown, these reports also offer a progress report on their sustainability targets.

ESG is high on both developers’ agenda. Allan, for example, linked his company’s “strong position, financially and operationally” to meeting environmental targets.

He said: “This position affords us many opportunities, not least the ability to lead change, which is why today we have raised the bar for ourselves and our industry by setting out ambitious targets to reduce embodied carbon through development, as well as clear plans to enhance social mobility both in our industry and through the places where we invest.”

Meanwhile, British Land hailed “further good progress” against its 2030 sustainability strategy and highlighted high up in the report that it had been awarded a GRESB five-star rating for its strong ESG performance.

There was little discussion of tech in either report (outside of several references to “smart enabled” developments) except where it related directly to meeting sustainability goals.

Here is what both developers revealed in their reports.


Targets and initiatives | Landsec published a net zero transition investment plan last year, becoming the first UK REIT to do so. The developer will invest £135m into its existing portfolio by 2030 in sustainability measures such as:

  • Optimising building management systems
  • Installing air source heat pumps
  • Increasing renewable capacity

Targets in the company’s new “Build Well, Live Well, Act Well” framework include reducing embodied carbon in office developments by 50% to below 500kgCO2e/sqm; supporting 30,000 people in finding work by 2030; and to link its remuneration policy to sustainability targets.

The report highlighted a few ways of achieving its carbon target:

  • Low-carbon materials
  • Smart designs with modern methods of construction
  • Standardised, reusable materials
  • Retaining existing structures

The Forge, the first office development to align with the UK Green Building Council’s framework definition of net zero, is set to complete at the end of the year.

The Forge Landsec

Visualisation of Landsec’s The Forge, set to complete in December 2022

Sustainability performance | Landsec achieved a 20.7% reduction in embodied carbon in its 1m sq ft development pipeline last year (though it did not give a total figure).

A big driver of the cut was the use of steel with more recycled material at 21 Moorfields, by far the largest of its four committed development projects at 564,000 sq ft.

At the same time, plans for Portland House were reworked to maintain more of the existing building, cutting the embodied carbon of the scheme to below 400kgCO2e/sqm

While energy intensity fell by 17.5% across the portfolio, Landsec said this partly reflected lower use of space, especially at the start of the year.

Some 44% of its London office portfolio is rated EPC B or higher (compared to 15% in the wider UK office market). The UK’s Minimum Energy Efficiency Standards will require commercial buildings to have an EPC B or higher by 2030.

Outlook and risk | The report suggested that sustainability has an effect on vacancy levels. While Central London vacancy “remains elevated at 9.0%”, more than four-fifths of this space is second-hand space “much of which does not necessarily fit today’s customer and sustainability requirements”.

Cybersecurity breaches were identified as a risk, and Landsec said there was an increasing number of attempted cyber-attacks with increasingly sophisticated tools.

British Land

Targets and initiatives | British Land plans to reach net zero carbon across its portfolio by 2030, as set out in its Pathway to Net Zero strategy.

In order to comply with MEES legislation, British Land appointed external consultants to conduct net zero audits.

The total cost of retrofitting the portfolio to meet MEES targets will be “in the region of £100m”. These retrofits will focus on energy efficiency “which typically have an attractive payback”, and about two-thirds of this will be funded by service charges or by customers directly.

British Land said it is primarily focused on energy efficiency and reducing carbon intensity. Its 2030 targets, measured against a 2019 baseline, are:

  • A 25% improvement in whole building energy efficiency
  • A 75% reduction in operational carbon intensity

The developer established a fund to pay for the necessary developments, allocating £60 per tonne of embodied carbon, plus an additional £5m. Total funding to date is £15.6m.

Canada Water Masterplan

British Land’s Canada Water campus development

Sustainability performance | Some 46% of British Land’s office space is rated EPC A or B. In total, 36% of its portfolio is rated A or B, up from 29% in September as a result of recertifications following building improvements in recent years.

Forecast embodied carbon in the office development pipeline is 632kgCO2e/sqm – compared to its 2030 target of 500kgCO2e/sqm (matching Landsec’s target).

The developer completed 1 Triton Square, its second net zero carbon development, re-using most of the superstructure to keep embodied carbon at 408 kgCO2e/sqm. Offsets – a teak afforestation project in Mexico and a community reforestation project in Ghana – were used to hit the net zero target.

British Land used Earth Friendly Concrete in Canada Water’s permanent piling works (a UK industry first), saving 240 tonnes of carbon emissions. Other materials included cross-laminated timber, recycled raised access floors and concrete with high recycled content.

Embodied carbon in the 1 Broadgate development, however, is 901 kgCO2e/sqm – above its 2030 target. British Land said: “[W]e continue to make improvements throughout the design and delivery process”.

The 336,000 sq ft Norton Folgate redevelopment will be all-electric with rooftop solar panels and “fully smart enabled”.

Outlook and risk | British Land expects strong demand for its campus developments specifically because they target BREEAM Outstanding ratings – something just 1% of London office buildings have achieved.

On the other hand, environmental sustainability risk “has increased in the year and is considered a medium impact risk with medium probability”. This risk includes:

  • Increased exposure of assets to physical environmental hazards
  • Policy risk from the cost of complying with new climate regulations
  • Compliance requirements from existing and emerging environmental regulations
  • Leasing risk as a result of less sustainable or non-compliant buildings

Wider use of technology across British Land was also identified as a risk. “In the wider market, cyber risks continue to be heightened due to the rise in attempted cyber attacks, in some cases exploiting changes in working patterns due to Covid-19.”

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