Investors with UK commercial property assets as part of their portfolio may want to check the buildings they own will meet the new standards for energy efficiency that are due to come into force in April 2018. A survey conducted by DTZ revealed up to 40 per cent of commercial real estate in the UK could fall foul of the new legislation, which requires all premises that are rented or sold to have a minimum Energy Performance Certificate (EPC) rating of E - with the scale running from A to G. According to the findings, many of these assets are considered to be a borderline E and are therefore likely to be impacted by the change in the law.
The firm warned any buildings that are not up to scratch - or that only just meet the lowest standards - are set to face a fall in value, unless work is carried out to improve their energy efficiency. Head of sustainability at DTZ Paul Brown commented: "Final details are yet to be confirmed, but once the proposals are launched, we will no doubt begin to see discounts being factored into property acquisitions to cover the improvements needed to make buildings sufficiently energy efficient." The organisation also pointed out that, from April 2012, EPCs will need to be arranged ahead of putting a commercial property up for sale, rather than at the conclusion of the transaction.
Director of policy (real estate) at the British Property Federation Ian Fletcher urged real estate investors not to leave making the necessary improvements to the last minute. He recommended taking the opportunity to carry out such work in a void period, noting "careful planning is something that the possessors should be thinking about". Mr Fletcher acknowledged 2018 "might sound like a long way off", but he stressed savvy owners will be looking for the most suitable time to make the required changes to their commercial property assets. Mr Brown added it is likely to cost more to complete energy efficiency work the closer the April 2018 deadline becomes, because there will be heightened demand for these services from businesses and investors whose assets are not prepared.
- Tuesday 21 February 2012