Research carried out by Arbnco has found that a third of commercial real estate with EPCs rated D and E on its platform dropped into the ‘at risk’ categories of F and G upon re-simulation.

This is worrying for the commercial real estate sector as from April 2018 any commercial property with an EPC rated as an F or G cannot renew an existing or embark on a new lease. The MEES legislation affects valuations and therefore is a risk to lenders/investors.

The re-simulation found that 24% of all buildings in the portfolios achieved a lower rating, buildings falling into the F & G band rating increased from 14% to 22% and 33% of all D and E ratings dropped to an F or G.

The re-simulation was carried out on the 3,500 buildings currently registered with the Carbon Estates EPC platform. All properties modelled were from portfolios of well-managed building stock with EPCs produced within the last five years.

Arbnco is to launch its Arbn Consult software platform to the consultant and EPC Assessor market from April 2017.  The firm claims the platform will enable quicker and better decisions to be made on the energy performance of commercial property.  The software provides the ability to quickly and accurately assess the EPC rating improvements required to ensure a property meets MEES regulatory compliance.

Simon West, co-founder of Arbnco, said: “With MEES just over a year away, landlords, property managers and their advisors need to be acting now to ensure buildings do not pose a risk. The analysis was conducted on well-managed building stock, so there is potential to observe a greater percentage drop in EPC ratings in poorer performing portfolios.

“Not everyone involved in the management of a building has a background in engineering, but the impacts of poor energy performance and forthcoming MEES legislation will affect all, and informed decisions need to be made.”

The full report can be downloaded from: https://tinyurl.com/EPC-resimulation