With interest rates rising and UK commercial property valuations falling at their highest rate in years, many are forecasting a prolonged downturn for the industry.
Investing in property is becoming less attractive and commercial real estate landlords need to work out new ways to make it more appealing.
Rising energy bills are costing businesses, and commercial building owners are in a place where they have to adapt or face the consequences.
Given that the UK is in an ongoing energy and economic crisis, as well as further concerns that Europe will face a much worse energy crisis next year, adapting properties to better deal with energy regulation has become much more appealing to building owners.
Energy consumption has never been more of a talking point – and truthfully, tackling it has never been easier. The issue is awareness. With costs already rising, it may seem counterintuitive to spend money on working out alternative methods, but the tools are there for anyone who looks for them. Demand-side response (DSR) can actually improve BREEAM ratings, increasing property value and the rent that could potentially be charged.
Green solutions that conserve energy and limit carbon emissions must be celebrated
Building owners can implement state-of-the-art devices that monitor a property’s energy consumption, identifying and regulating energy that is non-essential. These devices assess where energy is being used, providing accurate measurements on inefficiencies.
This can now be in the form of a small device that can be installed and managed for the property owner at no initial cost, operating silently and effectively. This means that commercial property owners can reap the benefits it provides, without any noticeable changes in the way the building is operated.
Furthermore, through the DSR scheme, owners that enact these changes can receive money back from network operators for reducing their energy consumption during periods of low supply.
Landlords have no excuses for not reducing their energy consumption, given there is a proven method that has no cost and works silently. It earns money and saves on energy. It’s a win-win.
There has never been more of an incentive to explore green solutions. Net zero has become a key topic in the UK, with the government setting a target of 2050 to be completely net zero. For this to be possible, green solutions that conserve energy and limit carbon emissions must be promoted and celebrated. Businesses should be pushed towards using solutions that are eco-friendly, being rewarded for playing their part in reaching a green future.
Understand the benefit
Building a committee of energy experts that raise awareness is in everyone’s best interest, commercial property owners included. The benefits of making the switch must be explained clearly to ensure that landlords are committed to green solutions. Making the change is not necessarily going to be expensive either.
Many building owners are content with their expensive energy bills, as they think adapting their buildings to be more environmentally friendly will cost even more money down the line. Most are unaware that it is easy to retrofit older buildings to be more energy efficient, rather than spending time and money on new developments. With proper education and incentives, landlords can better understand and implement technology such as DSR at no cost.
To cut a long story short, commercial property owners must act now. Waiting for the energy crisis to pass is incredibly risky and could backfire enormously. The plans to save on energy and reduce carbon footprint to reach net zero by 2050 are still in place, but the risk is starting later than those who were ahead of the curve.
Understanding and implementing innovative green solutions is not only good for the planet, but is an effective way of making your property a lot more attractive to potential buyers and investors. Addressing energy consumption now is the best way to remain profitable in the long run.
Chantel Scheepers is chief executive of OakTree Power