Under proposed regulations all commercial office buildings will need to register an environmental performance certificate (EPC) by 2025
London landlords will have to spend £30 billion upgrading older office buildings to hit proposed government environmental standards, according to a leading property agent.
Savills UK said commercial landlords will need to spend up to £40 per sq ft (£430 per sq m) to make necessary improvements.
Across all the capital’s office stock, Savills estimates the cost of bringing buildings up to standard will be £30 billion.
Under proposed regulations all commercial office buildings will need to register an environmental performance certificate (EPC) by 2025. By 2027, a minimum EPC Grade ‘C’ rating will be needed to receive any further rent from tenants or to re-let a property.
A Grade ‘B’ will be required by April 2030 onwards.
Buildings — both commercial and residential — contribute around 40% of the UK’s total carbon footprint, according to the UK Green Building Council.
Many businesses are already upgrading their offices. In January, the US bank Citi said it was completely overhauling its European headquarters at 24 Canary Wharf to make the tower completely carbon neutral. The project will cost upwards of £100 million and is set for completion by 2025.
James Bardrick, Citi UK’s CEO, said that the overhaul will make the nearly 25-year-old tower Citi’s “greenest facility ever”.
Investors are also pouring money into newly build “green” buildings. Goldmans Sachs’ asset management division bought a 75% stake in a new office development near London Bridge in January that was spearheaded by environmentally friendly developer EDGE.
In October last year, Welput, a central London office fund managed by property firm BentallGreenOak, said it intended to create a green-focused speculative £1 billion commercial building at 105 Victoria Street.
Victoria Bajela, London commercial property analyst at Savills, said more than 90% of leasing activity was for the best quality offices in the city in 2021.
She said: “With a limited supply of available Grade A space, rental pressure will remain upwards on high quality offices, and thus justify the spend on bringing secondary stock up the EPC ladder.”
Source : Evening Standard