Commercial buildings could fall short on energy efficiency standards
One-fifth of commercial properties in England and Wales could be prevented from being let in the future because they do not comply with the new Government energy standards. This is according to global real estate services firm Cushman & Wakefield.
Owners and investors are being encouraged to assess their risk and make energy efficiency improvement where they can so that their buildings reach the minimum standard.
The Energy Act includes a provision that from April 2018, it will be unlawful to rent out a business property that has an EPC rating below “E”. The research of Cushman & Wakefield shows that nearly 20% of commercial property buildings fall into the “F” and “G” categories.
Philip Webb, Head of Project Management and Consultancy at Cushman & Wakefield, said:
“These regulatory changes will have a significant impact on landlords’ ability to lease property, with the worst rated buildings un-lettable by law. However, owners should also bear in mind that occupiers will increasingly favour higher EPC-rated buildings which will have lower running costs, and help companies prove they have a strong sustainability track record.”
Alan Somerville, Head of Strategic Energy and Sustainability at Cushman & Wakefield, added:
“Investors need to act now. Although 2018 may seem some way off, given the time needed to identify where building efficiency upgrades are needed and to ensure the work is completed, delaying this process could prove very costly. It is possible for building owners to declare themselves exempt from the regulations in certain circumstances, however, they must sign up on a register which will be open from October 2016.”