How green is your office?

Thanks to the energy being used to heat, cool, light and service them, commercial buildings are now responsible for over 20% of all the UK’s carbon emissions. As a result, whilst targets state that CO² emissions from commercial buildings are meant to be reducing, they are actually remaining virtually static.

 

Although the government has made attempts to ensure the UK makes a leading contribution to the battle against climate change, it hasn’t yet been enough – Brussels recently warned that Britain will be taken to the European Court of Justice for failing to reduce carbon emissions in commercial buildings if more is not done to combat the problem. In response, the government has announced ambitious targets to make all non-domestic buildings zero carbon by 2020.

 

Going forward, it is essential that the commercial property sector rises to the challenge, taking the green agenda seriously so that the expectations of both the government and the corporate social responsibility policies of occupiers can be met.

 

In short, developers are going to have to ensure that their future plans are sustainable ones and face up to the government’s Energy Performance Certificates strategy. Guidelines here will force landlords and developers to seriously consider how they can update existing buildings, whilst ensuring that new buildings are designed to be long life, energy efficient, able to adapt to a variety of uses to meet changing needs and constructed of low energy and renewable materials.

 

Annual operating certificates will consider a building’s energy performance and management, whilst 10-yearly certificates will be required on points of sale, lease and lease renewal and will examine the fundamental performance of a development based on the design of the building.

 

Flexibility of new-build office space is a key element of sustainability and easily adaptable or mixed-use schemes will be increasingly encouraged going forward. A current example of a major sustainable project underway in the region is Gateway West at Newburn Riverside, which is being developed by Caddick Developments. This scheme is being designed to achieve the BREEAM Excellent standard – the construction and property sectors accepted benchmark for environmental design and management best practice.

 

These standards cover areas such as energy usage, pollution, transport, land use, building materials and water consumption and when complete, Gateway West will be a leading urban regeneration development for the North East, targeting the increasingly strong demand shown from a growing list of green-conscious occupiers.

 

However, for older buildings the environmental issue is more challenging and they may see a significant adjustment in capital values. Refurbishment programmes will provide the opportunity to reduce CO² emissions and increase energy efficiency and there are plans to introduce CO² emission quotas on commercial buildings to force owners to find ways to reduce energy use.

 

There are great returns to be had for those who readily accept and adapt to the changes, as increasingly carbon-conscious tenants become willing to pay more for environmentally sound property from which to operate. Similarly, investors who take the time to create a portfolio of ‘green’ properties will, over time, undoubtedly reap the rewards. Will political proposals for green ISA’s even encourage indirect investment by private individuals?