Manchester businesses face uphill battle to decarbonise real estate portfolio

A new report by property services firm, JLL, says investment in the sustainability of Manchester’s real estate stock needs to significantly ramp up to comply with an anticipated tightening of regulations.

The Envision Sustainability report, which sets out a plan for a low carbon real estate market for the UK, shows that just 24% of Manchester’s EPC certifications lodged for its office market were compliant to the highest A or B standards. The equivalent figure for the city’s housing stock was just 15%.

Other segments across the industry fared similarly. For general industrial, EPC A and B certifications is at just eight per cent, making Manchester the worst performing city of those surveyed, while the figure for retail sits at 25%.

The research shows the challenges the industry faces as tighter regulations are anticipated to come into force towards the end of the decade.

JLL’s analysis of EPC data across the UK illustrates the shortfall between awareness and action, with more than two thirds of EPCs registered in the past year not meeting proposed future standards.

Steve Hogg, head of the North West at JLL, said: “Manchester is often labelled as the success story of the UK’s regional cities, yet this research indicates that the city is at risk of being left behind when it comes to achieving net zero.

“We are seeing an increasing number of sustainable developments being brought to market, especially in the office and residential sectors, as occupiers further prioritise ESG credentials.

“However, with less than one in 10 industrial buildings meeting EPC A, we must also see more urgency in moves to retrofit existing stock, to ensure that the city is able to continue to thrive into the future.”

Emma Hoskyn, UK head of sustainability at JLL, said: “There’s no easy fix to create a more sustainable property sector, and our research shows that there’s a gap between knowledge and action.

“But challenges also bring opportunities. We know that sustainable real estate can be crucial to business success. Evidence suggests sustainable assets protect value – and in some cases enhance it – let more quickly and attract higher value tenants.

“Investors that act now should reap the benefits, while those that delay are likely to experience a reduction in value and tenant appeal for their assets over time.”