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Progressive landlords are trialling ‘green lease’ clauses across their portfolios to try to influence better landlord/tenant cooperation in reducing energy use
In addition, the requirement on all UK terms of rental growth prospects or ease of re- ability issues, with the evidence suggesting
companies to report their greenhouse gas letting. RICS believes that valuers need a that buildings that fall short of the prevailing
emissions from April 2012 should start to better working knowledge of sustainability market expectations will be increasingly at
focus minds on energy use in the workplace “in order to further advance awareness of its risk of accelerated obsolescence”.
but will it influence tenant behaviour enough potential to impact on the valuation process”. At the heart of the issue lies the importance
to affect rents and therefore values? The paper is intended to act as a stepping of green issues becoming a material considera-
RICS considers that sustainability is now a stone to more formal guidance that will be tion for tenants in their decision-making
key issue and one that will grow in included in the Red Book (The RICS process. This will need to be reflected in rents.
importance. It has recently taken action to Guidelines on Valuation) when it is next But it also needs to go deeper than simply
raise awareness of the issue, publishing its reprinted in January. price, arguably still the decisive factor
Information Paper on Sustainability and RICS spokesperson Philip Parnell, particularly in the current market.
Commercial Property Valuation, which it says chairman of the Valuation Sustainability Cutting energy consumption will also need
is an “important step towards embedding Working Group, was recently quoted as to be a key business issue for both landlords
sustainability as a core consideration in the saying that “the valuer has a clear responsibil- and tenants and both parties will need to have
valuation process”. ity to ensure that a valuation reflects all a robust and relevant strategy in place to
RICS also outlines ways in which sustain- material factors that may influence value. manage energy and carbon.
ability can be defined, how a building’s green Sustainability is one of the factors that is Until that happens, green issues and their
credentials can be assessed and how such rapidly gaining in importance. impact on how commercial properties are
factors might be reflected in a valuation, “Markets appear to be moving towards a valued are still in danger of being pushed to
whether quantitatively or qualitatively, in requirement for greater recognition of sustain- the margins.
Sustainable Business ❘ November/December 2009 31
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