Almost a fifth of Bristol’s commercial buildings could be deemed unlettable within three years unless they comply with tough ‘game-changing’ energy efficiency regulations.
The warning was made to property landlords and occupiers at a recent event staged in the city to underline the possible impact of the Government’s recently announced Minimum Energy Efficiency Standards (MEES).
From April 2018, it will be unlawful to let buildings with an F or G EPC rating under the Department of Energy and Climate Change (DECC) regulations. This would affect 18% of the 598,512 EPC registered commercial properties in the UK, and 17% of Bristol’s buildings. From 2023, the standards will be extended to include all leases in existence. 
The event, staged by The UK Green Building Council (UK-GBC) with sponsors property consultancy Bilfinger GVA and Sweett Group, the global property and infrastructure professional services business, heard that MEES could have significant value and cost implications for owners and occupiers.
These included a potential reduction in rental income, extended void or marketing periods and associated capital costs with installing measures to comply with the regulations.
The situation has been made worse as the introduction of MEES coincides with the Government’s controversial withdrawal of funding for the ‘Green Deal’ – the vehicle to assist financing of energy efficiency improvements to commercial buildings.
Bilfinger GVA associate Jonathan Gibson told the event, staged at consulting engineers Arup’s Bristol office, that the MEES regulations were likely to cause problems for at least a fifth of the commercial property market – with winners and losers in both landlord and occupier businesses.
“This impact will be particularly prevalent from now in the run up to the implementation date of April 2018 whilst the industry wakes up to the MEES regulations,” he said.
“Bilfinger GVA is advising our landlord and occupier clients to begin planning now to address the issues in their portfolio, and to take a collaborative approach to what is in essence a significant opportunity to improve the energy efficiency of the worst performing buildings in England and Wales.”
While there were some concerns over the quality and accuracy of EPCs, particularly those undertaken between 2008 and 2010, there was a common view among professionals that it was often straightforward to improve buildings for minimal cost and therefore with negligible impact on value, he said.
But there was a risk that MEES threatened to accelerate obsolescence and impact property values and rent negotiations on poorly rated buildings.
UK-GBC senior policy and business development advisor Richard Griffiths summed up the bigger picture, saying: “A few short years ago, no-one would have imagined that the least efficient buildings would soon be made illegal to let. MEES could be a game-changing piece of legislation, and one that other countries around the world will be watching with interest.”
