Real World Energy Solutions relate the cost of energy efficiency implementation directly to the EPC rating and commercial property value.
Energy efficient buildings will be increasingly demanded by occupiers because:
- In a world of spiralling energy costs twinned with a reliance on finite and insecure energy supplies businesses need to become energy efficient to protect their future.
- A more energy efficient approach to business can deliver substantial financial gains through reduced costs and more efficient and innovative operational methods.
- Increasingly, companies need to prove their environmental credentials and demonstrate their commitment to reducing energy consumption and Carbon Emissions. A robust Environment Policy is crucial for winning new business and will become more so as result of the Climate Change Act 2008.
- The Climate Change Act 2008 will introduce new tough new legislation to force businesses to reduce Carbon Emissions and meet the 80% reduction target by 2050. Amongst other measures it is widely expected that there will be increased business rates for energy inefficient buildings.
By understanding how energy consumption and carbon emissions will increasingly affect how companies trade both from a cost reduction and revenue generation perspective, it is clear this issue cannot be ignored by owners of commercial property.
Premium property values will be achieved for energy efficient buildings with low operational costs whilst inefficient buildings with high operational costs will quickly devalue.
Energy Performance Certificates (EPC’s) and the commercial property
market (see EPC quick guide)
EPC’s are compulsory nearly all commercial property, Sold/Let or newly constructed will need an EPC as of 1st October 2008.
If commercial buildings are labelled A–G with a simple Energy Performance Rating tenants have a choice – those with better ratings will be more desirable and therefore easier to let or sell.
As the system is so simplified we anticipate tenants/purchasers will chip asking prices as a direct result of a low EPC ratings.
Poor EPC ratings will lead to reduced rents and capital values and create a direct relationship between EPC rating and value.
Currently EPC’s only have any relation to commercial buildings when they are Sold, Let or newly constructed. However, as a link between EPC rating and value is established, market evidence will increasingly be used by occupiers to minimise rental increases at lease renewal and rent review.
How to future proof property against these changes in the market?
The market is already changing and we are already finding anecdotal evidence that more energy efficient space is letting more quickly and at higher rental levels. So now is the time to consider how your property will stand up to an evolving market and decide upon strategies to manage your assets.
Real World Energy Solutions has been established to specialise in the implementation of energy efficiency measures and through our unique group and construction capability we can help you improve the energy efficiency of your buildings or business in a cost effective manner.
The entire focus of our energy efficiency teams will be to improve your EPC rating for the lowest cost.
Call us on 01473 238444 to find out how we can help you formulate a long term asset management plan that focuses on developing the Best Value EPC rating for your commercial property.