Will energy performance rules leave most commercial buildings unlettable by 2030?

According to a report in The Times, up to 80 per cent of UK commercial buildings could be classed as unlettable by 2030 unless they meet stricter commercial energy performance standards. This alarming statistic underscores the growing importance of energy performance certificates (EPCs) and the tightening regulations surrounding them. But why are these rules becoming stricter, and what do they mean for landlords and tenants?

What the Energy Performance Rules Are

EPC ratings are a measure of a building’s energy efficiency, graded from A (most efficient) to G (least efficient). These ratings are crucial as they influence not only the environmental impact of a building but also its operational costs and marketability. The UK government plans to raise the minimum EPC standards, aiming for all commercial properties to achieve at least a ‘B’ rating by 2030. This ambitious target means significant changes for the commercial property sector, pushing many buildings to undergo substantial upgrades.

Why the Rules Are Changing

The push towards net-zero emissions is a key driver behind these changes. Buildings are significant contributors to carbon emissions, and improving their energy efficiency is vital for meeting climate goals. Political and environmental pressures are mounting, with governments worldwide recognising the urgent need to cut emissions. As a result, stricter regulations are being implemented to ensure that buildings contribute to a sustainable future.

The Potential Impact on Commercial Buildings

If a property fails to meet the required standards, landlords may find themselves unable to lease space, while tenants could face higher costs or reduced choices. This scenario poses a risk for both parties, potentially leading to a significant reshaping of the commercial property market. Landlords will need to invest in upgrades to maintain their property’s competitiveness, while tenants may need to reconsider their leasing strategies.

Challenges for Older Properties

Older offices, industrial units, and heritage buildings face particular challenges in meeting modern energy standards. These structures often require extensive retrofitting to improve their energy efficiency, which can be costly and complex. For instance, heritage buildings may have restrictions on alterations, complicating efforts to enhance their energy performance.

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How Retrofitting and Refurbishment Can Help

Retrofitting and refurbishment offer viable solutions for improving energy performance. Upgrades such as new lighting systems, improved insulation, heating and cooling upgrades, and the use of sustainable materials can significantly enhance a building’s efficiency. For example, installing energy-efficient lighting and heating systems can reduce energy consumption and costs, making buildings more attractive to tenants.

The Business Case for Acting Early

Acting early to meet energy performance standards can be more cost-effective than waiting until the last minute. Early compliance can lead to lower running costs, improved employee comfort, and future-proofing against further regulation changes. Moreover, proactive upgrades can enhance a building’s marketability, making it a more attractive option for potential tenants.

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Future-Proofing Your Commercial Property for 2030

Businesses should act now rather than wait until 2030 to address energy performance standards. By taking early action, they can avoid potential financial and operational risks associated with non-compliance. Shakery is positioned as a partner that can deliver projects, balancing compliance with creative design, ensuring that commercial spaces remain functional and inspiring.

Speak to Our specialists

Concerned about whether your building will meet future energy standards? We can help you plan refurbishments and fit-outs that bring spaces up to code while keeping them functional and inspiring. Contact us today to find out more.