The Minimum Energy Efficiency Standards (MEES) outlaw the letting of commercial properties with a rating of ‘G’ or ‘F.’ In April this year, this will extend to properties that are already let. The future trajectory is pencilled to go from a minimum of ‘E’ in 2023, to a ‘C’ in 2027 and a ‘B’ by 2030.
Landlords will need to ensure their property is compliant or risk receiving a fine, which are as follows:
- Breach for less than 3 months: 10% of the rateable value (min. £5,000 / max. £50,000)
- Breach for more than 3 months: 20% of the rateable value (min. £10,000 / max. £150,000)
- Providing false or misleading exemption information: max. £5,000
- Failing to comply with a compliance notice: max. £5,000.
Whether we will see a deluge of fines for non-compliance in April is debateable (given that enforcement is by the Local Authority trading standards team), but occupiers are increasingly demanding better EPC levels as part of their acquisition requirements. If the fines do not encourage landlords to improve their buildings, occupier demand and impact on rental levels ultimately will. There is a very real risk that poor performing buildings will become unlettable and ultimately stranded assets.
How we can help
We have advised a number of clients on works required to improve the EPC rating and general sustainability performance of an asset. These includes:
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Acquisition and Disposal Advice
As part of our wider technical due diligence of an asset we can undertake a review of the sustainability performance and provide a high level view on likely investment required.
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Detailed EPC Modelling
By building a digital twin of the asset we can model the impact on the EPC rating, running costs and energy usage from different levels of intervention – this measures what works would have the greatest impact and ROI.
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Wider Asset Strategy
Planning and costing of the works to unput into the wider asset strategy. This can include advice on service charge recoverability, dovetailing works with lease events and impact of managing works around existing occupiers.
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Project Management
We can advise on the most suitable procurement route and manage the delivery of the works.
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Broader Sustainability Screening
Broader Sustainability Screening
Case Studies
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SEGRO
We have undertaken inspections and EPC modelling for c30 predominately industrial properties totalling 2,676,000 sq ft. We provided a report detailing the current EPC and the investment required to improve the EPC rating to various bands.
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Bedford Borough Council
We carried out a desktop review of the councils industrial and retail portfolio (c80 properties). We reviewed the EPC information and provided high level cost estimates on the likely improvement works required to comply with MEES to assist with capital expenditure planning.
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Blake House, Solihull
We project managed the £2.6m refurbishment of this office building enhancing the EPC from an E to a B. Works included installing solar PV panels providing 87kW of power, new LED lighting, VRV air-conditioning and EV charging points.
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25-35 Park Lane, London
We project managed the replacement of the air-conditioning in this prestigious office building on Park Lane. Works involved replacing the existing fan coil system with a new VRF system and removing the reliance on gas heating. The works were undertaken whilst the building remained fully occupied. The EPC was improved from a E to a B.
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