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Exeter, 28th November, 2013 – Today it was revealed that currently 21 per cent of the registered, commercial buildings in Marsh Barton and 13 per cent of the buildings in Southernhay in Exeter are at risk of falling into disuse unless improvements are made to ensure they meet environmental regulations.
Jones Lang LaSalle and Francis Clark held a seminar for local business leaders this morning (Thursday 28 November) at Sandy Park to explain the impact of the legislation that will come into force in April 2018 under the Energy Act 2011.
The legislation proposes to make it unlawful for landlords to lease space, and for occupiers to assign sublet or renew leases, in buildings with an Energy Performance Certificate (EPC) rating of F or G. An EPC represents the energy efficiency of a property on a scale of A to G. The most efficient properties are in Band A.
Since the recession, market conditions have shortened lease commitments and with many leases coming up for renewal around 2018, Jones Lang LaSalle are warning landlords that they are at risk of not only having to cover vacant building costs but face the capital cost of refurbishment before the property can be re-let.
In the UK, buildings represent 47 per cent of the UK’s current CO2 emissions and whilst there has been significant progress made within the automotive and aviation world, property has lagged behind.
The Energy Act 2011 is the turning point for the industry as it poses a very real threat if landlords, tenants and lenders continue to fail to put green issues front of mind, but at the same time it presents an opportunity for savvy investors and proactive occupiers to capitalise by acting quickly to refurbish their buildings and ensure they are future-proofed.
Tim Western, director, Jones Lang LaSalle’s Exeter office said: “The Energy Act has given the green agenda some serious teeth and the property industry must look up and take notice now. Despite the Bill receiving Royal Assent over two years, it is only now that landlords, tenants and lenders of non-residential properties are waking up to the potential impact."
“We investigated the number of commercial buildings that would be affected in Exeter if the regulations were in place today and the figures are high. If this is enforced as drafted it will have a significant impact on the economy.”
“Efficient buildings will have increasingly a competitive edge in the market place and this is feeding through to values.”
“We’re encouraging landlords, tenants and lenders to get a clear and full understanding of their energy performance risk.”
Damian Lannon, partner, Francis Clark’s Exeter office said “Various tax reliefs are available to mitigate much of the expenditure incurred in meeting the requirements of the new legislation. It is important to seek professional advice in the planning stage to ensure that these reliefs are maximised to reduce the overall impact.”
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