Around 17 per cent of commercial buildings could be unlettable by 2018 under new Energy Performance Certificate (EPC) regulations, warns an environment and engineering consultancy.
Provisions detailed in the Energy Act make it mandatory for commercial properties with a poor EPC rating – F or G – to be brought up to E or higher before they can be let.
EPCs, which became mandatory in 2008, are needed whenever a property is built, sold and rented and are valid for 10 years. The certificate contains information about a property’s energy use and typical energy costs and recommendations about how to reduce energy use and save money.
Consultancy WSP Group said it has analysed more than 4,000 EPCs it has undertaken since the rating became obligatory. The company found nearly one in five buildings were rate F or G. Also, if E-rated buildings were included in being not of an acceptable standard for letting, then the potential failure rate would rise from 17 per cent to 35 per cent, it noted.
The failure rate could be increased further as the benchmarks for ratings change, WSP said.
“EPCs are benchmarked by building regulations that are continually updated and revised, meaning that even ‘safe’ ratings such as ‘E’ and ‘D’ may not meet the standards required in 2018,” a statement said.
Daniel Grandage, associate director at WSP, said the danger is that unaware commercial property owners will lose income if they don’t keep on top of changes to EPC ratings.
“Although the regulations will not come into force until 2018, they are already having an impact with buyers now looking to invest in D rated assets or above,” said Grandage. “It shows just how important it is to understand the risks that face your portfolio so that you can be prepared and take action.”
Boosting an EPC rating doesn’t necessarily entail a huge outlay of capital, said Grandage. Upgrading to more efficient lighting will often have the biggest effect on ratings.
Also, just keeping better, more detailed information on a building’s equipment and changes to it and the shell can improve ratings, he said.
“Many older EPCs created during 2008 and 2009 are of lesser quality and use default values where efficiency values couldn’t be sourced, which can mask the true rating of the building.
“Furthermore, the rules, conventions and quality assurance were less developed than they are today and many older EPCs do not truly reflect the actual condition of the building. The question you need to ask yourself is, if they were re-run in 2018, would they stand up to the inevitable scrutiny of a potential investor?”
In October, FM World reported on a report published by Jones Lang LaSalle (JLL) that found buildings with a poor EPC rating might, in reality, be more energy efficient
The report, done in conjunction with the Better Buildings Partnership (BBP), emphasised the importance of measuring and achieving reductions in energy consumption.
Jones Lang LaSalle has been working with the BBP over four years to measure the actual energy performance of 200 managed properties in London.
The report, A tale of two buildings, found the poor E-rated building was more energy efficient than the ‘B’ building.
The report concluded that EPCs do not take occupiers’ energy demands into account. Factors such as energy loading of fitted-out space, the occupier’s operating hours and the intensity of energy use can all significantly affect the energy performance.