Landlords warned to beware green ‘time bomb’

AS much as a fifth of all of Birmingham’s commercial buildings could become virtually unlettable within six years if landlords don’t take urgent action, according to a new report by property consultancy Cushman & Wakefield.

The Energy Act of 2011 proposes to make it unlawful to let properties rated as F or G on their Energy Performance Certificate (EPC) after April 2018.

And with many High Sreet shops and historic office buildings falling far short of the energy efficiency standards required to achieve an E rating (with A being the highest award) landlords could be facing a real time bomb, according to Cushman & Wakefield’s Phillip Taylor.

Taylor, head of asset management at the firm in Birmingham, said: “A building with a poor energy efficiency rating will effectively become obsolete until improvement works are undertaken. Landlords will not be able to let the building and tenants won’t want to lease it.

“However the good news is that landlords have six years to get their buildings in order but they need to start planning now so they are not caught unawares and are left with empty shops and offices in their portfolio.

 “While the vast majority of buildings will be able to be brought up to standard it will not be cost effective for landlords of some older stock and they may take the decision to leave their building empty or demolish it and rebuild. This is particularly possible with older units in high streets that have not been refurbished in years and are let on short term leases or temporary tenants.

“Although this is bad news for the landlords in the long term it could bring a new lease of life to some areas, replacing tired buildings with modern, energy efficient, desirable retail units.”