54 roundtable: commercial property ... continued from previous page
Coote felt the Green Deal option at least enabled landlords and tenants to discuss EPC issues as an ‘energy event’, much in the same way as lease events.
Murray queried if occupiers would try to leverage the EPC issue to negotiate more favourable terms with landlords.
Finnis: “Corporate occupiers are always seeking to de-risk, so they will want works to be undertaken before they take occupation. They will be looking for a landlord to invest in the building today so that they can take on a new commitment going beyond 2018.
“In terms of leveraging, it’s simply a line in the sand, not a sledgehammer that either side can particularly use,” he added.
Responsible occupiers wanted
Apart from the problems of designing in a vacuum of uncertainty, Castle raised the architectural challenge of designing for irresponsible occupiers.
“The main thing about EPC ratings is that they are not a true reflection on how buildings are occupied. The Government wants us to reduce energy use, so as an industry we have to find a mechanism to incentivise the occupiers to be responsible in how they use the building.”
“As architects we constantly put in the best systems and adopt green engineering, heat recovery etc, but if the building is not occupied properly then we might as well not have bothered, and that’s one thing the Government has not logged onto yet.”
Jones said Hoare Lea had noticed that universities, with their changed funding structures, had gone through a sea-change and were no longer paying lip service to controlling energy usage.
While DEC displays within public buildings were at least raising the public profile of energy use, Castle wondered if DEC and EPC differentials might be used to ‘name and shame’ those buildings that should be doing better. “The future task is to get everyone
working to achieve the true energy potential of buildings.”
Jones was heartened by energy and sustainability now getting traction on corporate CSR agendas. “Companies need to be seen to be occupying buildings that are more energy efficient. Having said that, government buildings are procured in the worst possible way. The focus is skewed to minimum costs and accordingly you get a minimum standard product.”
Griffiths admitted the UKGBC was a standard bearer for DECs. “We are very keen for them to become more widespread and part of the toolkit to report corporate energy use, which will be required under Article 8 of the EU Energy Efficiency Directive.”
He noted that Australia had adopted a DEC-like methodology to measure the environmental performance of all types of buildings. It is widely respected, even boldly referenced in advertising and marketing to show buildings’ status. “They have got this buildings’ rating scheme right and it has absolutely transformed their market.”
Ironically, the scheme is called the National Australian Built Environment Ratings System …. NABERS.
Will our energy performance affect
David Murray
us internationally? Murray queried if unclear energy performance ratings would affect the UK adversely in international commercial property markets.
Dean suggested it would depend upon the size and nature of the corporate occupier. “It is certainly on the CSR agendas of the American companies who are very advanced in their requirements, and incentivised to get such ethical matters right. It does come across more in negotiations nowadays, along with BREEAM and the US green building equivalent LEED.” But, EPC doesn’t rate within such negotiations as a deal-breaker, she added.
Griffiths suggested that as owners make sure their buildings comply in EPC terms, it will improve their portfolio stock quality overall, making it more attractive to occupiers wherever they come from.
Finnis: “It will make buildings more efficient, but efficiency can be delivered in different ways – occupation density, aesthetics, and EPCs. But, assuming the landlord has the capital to invest in the stock, then the stock overall should upgrade.”
Nigel Pavey
www.businessmag.co.uk Coote said that was a good thing
Finnis said several big corporate occupiers were actually already analyzing their leased properties, thinking of their EPC risks well beyond 2018.
Coote pointed out that EPCs were still far down the agenda for many corporates and smaller occupiers, but such matters should come to notice on any deals involving a proper due diligence process.
What do we tell the
Government? Dean: “Everyone knows we have got green issues with global warming and climate control, but we do need better drafting of necessary legislation and initiatives. This Government has been plagued by poor drafting, so I would advise them to tighten up what we’ve already got, and listen better to future feedback and consultations.”
As a former civil servant, Griffiths advised the Roundtable not to wait until the Government’s consultation paper comes out, but to voice its industry views now. “This legislation needs to work for occupiers and landlords, but they are also the people who will make the legislation work.”
Details:
www.segro.com THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2013
because occupiers are now “gravitating up the food-chain” looking for quality buildings able to offer modern workstyles and an improved corporate image.
Does the legislation need a compliance
champion? Dean said many large property corporates and owners would already have someone taking up such a role for their organization. However, a sector ‘champion’ might help create more awareness among occupiers in general about the Energy Act and EPCs, and also drive worthwhile ideas for improvement or necessary government lobbying.
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