Market failing to drive green real estate
MIPIM 2012: Property chiefs have called for further financial incentives to bring about a revolution in real estate sustainability.
At a British Property Federation and Jones Lang LaSalle MIPIM event today, delegates heard that more than 90% of non-domestic stock was built before 1986, when requirements for better thermal performance began to be introduced.
Much of the stock built before then is relatively poor by today's standards and with annual replacement rates of only 1% to 2%, around 60% of the existing stock will still be around in 2050.
BPF chief executive Liz Peace said: "The property industry has made great strides, but until there is a link between strong sustainability credentials and better financial performance it is difficult for the market to respond without intervention."
Hammerson chief executive David Atkins said: "It is clear current environmental legislation is failing to encourage change particularly for existing buildings and as such we have been calling for the roll out of display energy certificates as it offers a clear link to capital value."
JLL head of professional advisory Andrew Renshaw said: "As a result of the Energy Act 2011, it will potentially be unlawful to let F and G EPC-rated buildings after April 2018.
"The cost to improve energy performance will have to be met by the owner and it is estimated 18% of properties fall within this category so the impact on existing stock will be a serious problem - financial incentives would mitigate this and even encourage owners to be proactive in improving energy efficiency."