Revised Energy Efficiency Law To Impact Many London Offices
UNITED KINGDOM – Due to amended energy efficiency rules in the country, a research revealed that nearly 25 percent of office spaces in inner London cannot be leased out starting from April 2023, reported the Evening Standard on Monday evening (27 February, SGT).
Notably, a study by BNP Paribas Real Estate estimated that about 24 percent of office buildings in inner London fail to meet the standards under the New Minimum Energy Efficiency Standards (MEES).
The new energy efficiency rules cover all privately leased property, making it an offence to continue to rent out a commercial space with an energy performance certificate (EPC) lower than grade E, even if the property is already being let.
Come 2027, an additional 27 percent of existing office properties cannot be leased unless they have an EPC of at least grade C.
BNP Paribas Real Estate’s Head of commercial properties Stephen Wolfe explained that the post-COVID shortages and the UK’s cost-of-living crisis have pushed up both energy and construction material costs, leaving many office landlords unable to improve their buildings’ energy efficiency.
“Across London, the market and competition for occupiers is hot, putting the value of assets at an even greater threat,” he added.
To enhance an office property’s energy performance, commercial property owners often need to carry out works, like upgrading insulation and installing solar panels, as well as replacing windows and boilers.
On the other hand, office towers that have been constructed in the past two years, such as Google’s UK headquarters in King’s Cross at 6 Pancras Square, are likely to already comply with the new energy efficiency rules.
