Are commercial landlords ready for new 2023 energy efficiency rules?

Are commercial landlords ready for new 2023 energy efficiency rules?

Research from international real estate advisor Savills has revealed that 185 million sq ft of UK retail space is at risk of becoming unlettable by next year, if new Minimum Energy Efficiency Standards (MEES) are not met. Another recent survey by Deloitte found that 10% of London’s office buildings share the same fate.  

The MEES regulations currently prohibit non-domestic landlords from granting new tenancies if the building has an EPC (Energy Performance Certificate) rating of Grade F or G. However, this will change on 1 April 2023, when it starts to apply to existing tenancies, too.

There are longer-term targets on the way for all commercial buildings to be rated a minimum of Grade C by 2027, and Grade B by 2030.

Getting your building MEES ready

If you are a landlord of a non-domestic private rented property with a rating of F or G, then you have two choices: either claim an exemption (there are some valid reasons for this), or, implement recommended energy efficiency improvements to bring the building to E rating or better. Ideally, you should be considering measures that achieve an EPC rating of C or B, to prepare the building for future standards coming in 2027 and 2030.

Landlords can be granted an exemption if they can show that the cost of purchasing and installing a recommended improvement or improvements does not meet a simple 7-year payback test. But, by seeking exemption rather than taking action, landlords fail to tap into an increasingly demanding tenant base.

As Deloitte’s Crane Survey found, “tenants’ own commitments to sustainability have redefined what offices they want to occupy in the future and how quickly they need to move to achieve those targets. Tenants are more likely than ever to reject offices that do not meet certain ESG criteria.”

Efficient control

One of the most common, and cost-efficient ways of reducing energy demand is by improving the control of the heating, lighting and ventilation. When buildings are truly “smart”, consumption can be dramatically reduced, and also deliver a healthier, more comfortable environment for occupants. It’s important that whatever upgrades are made also work well with other building systems so that the building is operating at peak performance. At BGES Group, we’re never afraid to question the client brief and offer holistic “whole building systems” advice to deliver on this.

For even greater energy savings, ongoing monitoring is key. At BGES we’re passionate about giving our customers that visibility. Our remote monitoring service gives customers a secure, single point of view of their site or estate. Any event, whether they’re operational or energy related, are immediately detected and acted upon. Less downtime, lower costs and no energy waste.

If you’d like to learn more about how we can help you become MEES compliant, or for no-obligation advice on improving the energy efficiency of your estate, get in touch.