UK property industry will try to meet green targets, seminar hears

The UK property industry will strive to meet government sustainability targets despite the prolonged economic turndown, property industry leaders told a MIPIM event today (Tuesday 06 March).

Delegates at the event heard that from no later than 2018, and potentially sooner, all F- and G-rated residential and commercial properties could be unlettable under the government's 2011 Energy Act. It has been estimated this will impact 18% of all commercial properties in the UK, some 600,000 properties.

Delegates at the ‘Are we too broke for sustainability' seminar heard that while there's unlikely to be a green premium, that is higher rents or values for better performing buildings, anytime soon, government legislation will eat into the value of F- and G-rated properties, forcing landlords to respond to avoid obsolescence.

The British Property Federation has called on Government to make it clear when E-rated, and other better performing properties, also face the same prospect to provide landlords with a clear roadmap.
  
‘The property industry is doing a great deal despite the economic downturn to put its house in order. But it needs clarity from Government as to exactly when F- and G-rated properties will be unlettable and a clear roadmap going forward,’ said Liz Peace, chief executive of the BPF.

‘The economic woes have made thongs difficult but sustainability as an issue isn't going away and faces becoming more and more business critical,’ she added.

According to Phillip Parnell, head of real estate management and valuation at Drivers Jonas Deloitte agreed, noting that far from dwelling on the  added value  debate of so called sustainable properties, real focus needs to be given to the erosion in value of less sustainable stock.
 
‘This is where the valuation community can most clearly articulate differentials in value through variances in, for example, void, CapEx and relet assumptions and where we are arguably therefore already witnessing value shift now,’ he said.

‘This trend looks set to continue as regulatory mechanisms and legislation targets weaken certain existing stock; and consequently where many property investors are most exposed,’ he explained.