In the wake of a hard-hitting report from real estate firm Savills which indicated that 185m sq ft of all retail space in the UK could soon become ‘unlettable’ (1), there has been a further wake-up call about the imminent enhancements to the UK’s Minimum Energy Efficiency Standards (MEES).
As initially introduced in 2015, the MEES specified that property owners or landlords could not grant a tenancy to new or existing tenants of properties with an Energy Performance Certificate (EPC) rating of F or G – the categories considered as being ‘sub-standard’.
But the new measures coming into effect on 1 April 2023 mean that it will also be unlawful to continue to let properties with an F or G EPC rating. Consequently, all let commercial properties will need to have a minimum rating of E; those falling below will require all cost-effective energy efficiency improvements defined by MEES to be undertaken by the deadline.
This prospect had already been causing a wave of concern across the UK’s commercial property sector, with the Savills report highlighting the challenge of upgrading the 150m sq ft of ‘at risk’ space which is the responsibility of smaller investors. This type of property is often the subject of fragmented ownership and is in locations where other other occupational challenges exist.
‘Get works done and get it right’
Now a new study by BNP Paribas Real Estate has turned a particular spotlight on the worrying implications for commercial stock in inner London. Under the changes being implemented on 1 April, it is suggested that 8% of properties could become unlawful for new lettings and unlawful to let if they are not brought up to the standard of the new MEES requirements (2).
