The UK government has finally announced the new deadline for minimum energy performance certificates for commercial property.
By 2031, buildings of more than 1,000 sq m (c. 10,700 sq ft) need to reach an EPC of B, if the legislation passes through Parliament.
What does this mean for the office industry? We’ve broken it down:
For landlords
While landlords will welcome the end of the five-year consultation to get to an announcement, it will have repercussions for many.
If a building does not achieve an EPC of B or above by 2031, the landlord won’t be able to lease it.
At the moment, an estimated 73% of UK commercial real estate only achieves an EPC of C or below. A huge amount of capital will have to be directed towards improving energy efficiency between now and then.
Smaller buildings of below 1,000 sq m will be exempt, which the government says will give small businesses and high street landlords more time to upgrade their buildings, with no set deadline.
There’s a plus side, of course. The whole point is to tackle the enormous percentage of emissions that the built environment is responsible for.
The government estimates that asking landlords of larger buildings to ensure their properties comply could reduce bills by £360 million a year by 2031.
For occupiers
2031 might sound like a long way off, but it’s worth keeping in mind.
It could be great news. An efficient building means lower bills and a better working environment.
It could also mean disruption. For example, if you are considering an office lease in the near future, bear in mind that a landlord may need to carry out significant refurbishments between now and 2031.
Landlords might increasingly build green clauses in leases. These could specify actions an occupier has to take to make sure the building maintains a low enough EPC rating.
A final impact could be that secondary offices may be taken off the market, as they don’t perform well enough. This could exacerbate London’s growing shortage of available space.
If you’ve got any questions, don’t hesitate to get in touch with Andrew Gibson or Ben Orchard-Smith.