New energy efficiency regulations will make one-fifth of North East commercial properties un-lettable

Richard Wilson, Senior Associate Partner and Head of Property Management at Dodds Brown

Up to one fifth of commercial property in the North East could become un-lettable in less than two years’ time, unless landlords take action soon, warns Teesside independent commercial property consultants Dodds Brown LLP.

Richard Wilson, Senior Associate Partner and Head of Property Management at Dodds Brown, says that new energy efficiency regulations, to be introduced from 1 April 2018, mean that it will be unlawful to rent out business premises with an Energy Performance Certificate rating below E.

He says: “Nearly 20% of commercial property is presently rated F or G.  Unless landlords improve these premises before April 2018, they will be unable to agree a new lease on them, with penalties for non-compliance of 20% of rateable value, of up to £150,000.”

According to Craig Parrish, Dodds Brown’s Facilities Manager, the office sector has the highest proportion of F and G certified units and a large proportion of Es, although in terms of total numbers of units, the retail sector has more F and G certificates.

Mr Parrish, who is a Non-Domestic and Domestic Energy Assessor, qualified to carry out energy assessments and produce Energy Performance Certificates for 95% of commercial buildings, as well as for mixed use properties, says: “This is a market wide problem.  Landlords need to act now and consider which of their properties may be affected by the new regulations and then consider how they can make the energy efficiency improvements required to gain at least an E rating.

“With time ticking this is likely to be a refurbishment or redevelopment at the end of a lease which terminates in the next two years.  Alternatively, landlords should also investigate whether the work required to reach an E rating could be carried within the normal cycle of on-going maintenance, repair and renewal.

“There are some safeguards to ensure that new regulations only require permissible, appropriate and cost-effective improvements, but we can advise any landlords on what changes are required.”

Through its Building Surveying and Property and Facilities Management Departments, Dodds Brown carries out building surveys and energy assessments and recommends programmes for property maintenance and regulatory compliance.  It can also provide full project management services, report on works’ progress and quality, and ensure health and safety compliance.