Member Article

Property owners in the UK are already feeling the pinch, with a slowdown in activity coupled with economic factors, including high inflation and interest rates - causing a further tightening in the lending market.

The Minimum Energy Efficiency Standard (MEES) regulatory regime is another cause for searching behind the sofa cushions for coppers in order to upgrade, update and 'green' existing assets.

Specific types of property will cause more angst than others when it comes to refurbishment to meet the EPC targets.

This is, in part, due to the age of current stock – as the oft-quoted statistic has it, 80% of the buildings that will be standing in 2050 have already been constructed.

And considering current financial conditions, carrying out significant works at substantial cost may not be that appealing.

It is perhaps no surprise then that new research by Knight Frank suggests that by 2030 when the minimum requirement is raised to EPC B, as much as 404m sq ft of existing warehouse space could be unlettable.

Other sectors have their own challenges. For office space, for example, the drive towards Grade A and ‘best in class’ assets may mean underperforming properties are also in danger of becoming obsolete, or at least less attractive to occupiers and investors.

There is clearly much to be done to meet the minimum EPC C standard in 2027 – and a colossal effort to meet EPC B in 2030.

The focus must now be on finding solutions to meet these standards, while also making best use of potentially unlettable space.