Fifth of UK office space fails EPC energy efficiency rules

Nearly a fifth of the UK’s office space cannot be let to the “overwhelming majority” of tenants because it does not meet new energy standards, according to a survey of the sector.

Under energy efficiency rules that came into effect in April, all tenanted commercial property buildings, from offices to shops and warehouses, need to have an energy performance certificate (EPC) rating of at least an E. A is the highest and G the lowest. The regulations are known as the minimum energy efficiency standards, or Mees. Measuring the supply of office space by EPC rating, the property agent Carter Jonas has found that 17 per cent of it sits in bands F and G and is therefore legally unlettable unless remedial action has been taken.

The agent’s report did note, however, that in reality this figure will be lower given that exemptions will apply to some properties and others will be in the process of being modified.

Carter Jonas’s Office Market Sustainability Index compares the average sustainability level of the office stock across 12 markets. It has found that Oxford, Cardiff and Edinburgh have the highest percentage of low-quality offices. Cities including Glasgow, Edinburgh, Birmingham and Bristol could find that 70 per cent of their stock will be unlettable by 2027 without capital investment, potentially increasing to 90 per cent and above in 2030.

Only 28 per cent of the total UK office supply is high quality and this is where most of the demand is now focused, Carter Jonas added.

Scott Harkness, the company’s head of commercial, said that the new energy standards were pushing sustainability high up tenants’ wish lists. The competitive labour market means that providing an attractive and sustainable work environment “is vital for the recruitment and retention of talent, encouraging working from the office and promoting the well-being of employees”.

He added: “The overall disparity between the cities suggests there may be opportunities for targeted strategies in sustainability and energy efficiency in these markets, involving local authorities, landlords and investors.”

Read more:
Fifth of UK office space fails EPC energy efficiency rules