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ONE IN FIVE COMMERCIAL PROPERTIES DROP EPC RATING

Research conducted by arbnco
Research carried out by arbnco has found that energy efficiency standards have dropped in nearly one in five commercial properties ahead of the Minimum Energy Efficiency Standards (MEES) legislation hitting in April. 
 
Almost 20% of commercial real estate on arbnco’s platform has fallen into a lower Energy Performance Certificate (EPC) category upon re-simulation. More than a tenth of all E rated properties have dropped to an F or G rating, placing them in the MEES ‘at risk’ categories of becoming ‘sub-standard’ when the legislation kicks into force in April 2018.
 
The re-simulation was carried out on the 3,620 buildings currently registered with the arbnco EPC platform, using the latest Simplified Building Energy Model (SBEM), version 5.4a. SBEM is the Government approved software tool used to calculate the energy required to heat, ventilate, cool and light a commercial property over a 12-month period, under ‘normal’ working conditions. 
 
All properties modelled were from portfolios of well-managed building stock with EPCs produced within the last five years. There is potential to observe a greater percentage drop in EPC ratings in poorer performing portfolios. 
 
In total, 17.7% of buildings in the portfolio achieved a lower EPC rating. 11% of E ratings dropped to an F or a G. 60% of properties on the platform are now rated D, E, F or G, showing that highly rated properties have become more difficult to achieve.
 
Overall, 14.8% of properties on arbnco’s platform are now rated F or G, deeming them ‘sub-standard’ and non-compliant with MEES. Based on this representative sample of data, it is estimated that up to £130.68bn of the UK commercial property market could be at risk of MEES. 
 
Simon West, co-founder and director at arbnco, said: “MEES has been on the horizon for a long time now, but the statistics from our re-simulation tell us that some commercial real estate investors and subsequent stakeholders are still not heeding the warning. Those who are in the F and G categories have less than two months to ensure compliance, or else risk impacting the capital value of their assets.”
 
For a detailed analysis of the implications of MEES for asset values and lease renewals, download arbnco’s white paper: http://bit.ly/2FLdbPD

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