Almost a quarter of London’s offices could be unlettable from April because of changes to energy efficiency rules, according to new research.
New Minimum Energy Efficiency Standards (MEES) will apply to all privately rented property, making it an offence to continue to let a commercial space with an energy performance certificate worse than an E, even in the middle of a lease term.
Data from BNP Paribas Real Estate suggested that around 24% of buildings in inner London already fail to meet the standards.
By 2027, a further 27% of existing buildings could be unlawful when the proposed next phase of the regulations comes into effect, which would mean buildings must have an EPC of at least C.
Stephen Wolfe, head of commercial at BNP Paribas Real Estate said post-pandemic shortages, the war in Ukraine and the cost-of-living crisis have driven up energy and material prices, leaving many landlords unable to upgrade their buildings.
“Across London, the market and competition for occupiers is hot, putting the value of assets at an even greater threat,” he added.
Landlords often need to carry out work such as replacing boilers and windows, upgrading insulation, and adding solar panelling to improve their buildings’ energy performance.
Offices which have been built in the last couple of years are likely to already meet the new standards, such as Google’s existing King’s Cross headquarters at 6 Pancras Square.
