New analysis by Knight Frank has found that retrofitting and refurbishing older office buildings to modern, sustainable workspace can bring them more in-line with prime rental levels.

According to Knight Frank, the average rents achieved for second-hand offices in London that are not energy efficient (EPC C rated and below) are currently 35% below prime rentals, widening from 27% (below prime levels) in 2020.

The new report, The Business Case for Action, examines 130 office retrofit and refurbish projects undertaken in England and Wales between January 2020 and July 2024, all of which improved the building’s amenity and EPC-rating from ‘C’ and below to ‘B’ and above.

It finds that the gap of rental levels achieved, relative to prime was closed on average, by 18 percentage points, after retrofitting and refurbishing.

The analysis, which is the first of kind, calculates the relative rental uplift that is directly attributable to retrofit and refurbishment by anchoring the average rental level pre-and post-intervention to discount any market increases in rents over the period.

Flora Harley, head of ESG research at Knight Frank, said: “With 75% of office space set to fall below proposed sustainability standards by 2030…there is an urgent need for landlords to upgrade and reposition older buildings.”