2018 is a key date for all occupiers and owners of commercial buildings as this is the date when properties need to meet legal green standards on Energy Performance as set by the Government. A recent article in the Estates Gazette highlighted the scale of the problem.
All properties being marketed for sale or to lease must have a Commercial Energy Performance Certificate (CEPC), however from 2018 legislation is to be tightened even further.
From 2018 it will be illegal to let a property rated below rating E, for some this means just one rent review away! For others it is already equating to reduced sales offers by around 5% if the EPC rating isn’t clear or improvement achievable for minimal cost.
The Estates Gazette recently commissioned an analysis on the cost of bringing the UK’s EPC-rated F & G non domestic properties up to at least the required E standard. The result, an estimated £29 bn for around 200,000 commercial properties to be brought up to standard. This equates to approximate 16% of such properties in England and Wales
A consultation document on the policy is due to be published later this Spring which will provide guidance to both large and smaller organisations on their personal responsibilities. How the policy is enforced is uncertain, however business rates are likely to be adjusted to reflect the rating. For those able to ‘retrofit’ their F & G grade properties there will be savings to be made on the annual running costs of their properties and they can expect a higher price in the event of a sale.
The implications for older, poorer quality commercial property could be severe as the new legislation may make them un-lettable. Furthermore the costs associated in retro-fitting may be unviable.