Capital investment needed for ‘unfit’ office spaces

New energy regulations were introduced for commercial office spaces earlier this year. Many buildings will need remedial works in order to be fit for purpose.

Carter Jonas has found that a large portion of the available office space cannot be leased to tenants.

New efficiency rules that came into effect in April outlined that all tenanted commercial property buildings, from shops to residential property, need to have an EPC rating of at least an E.

Measuring the supply of office space by EPC rating, Carter Jonas has found that 17% sits in bands F and G. Therefore, making them unfit for new tenants, unless remedial works are implemented.

Carter Jonas’ Office Market Sustainability Index compares the average sustainability level of the office stock across twelve markets.

The highest percentage of low-quality offices are in:

• Oxford
• Cardiff
• Edinburgh

While Glasgow, Edinburgh, Birmingham, and Bristol could have 70% of unlettable stock by 2027 without capital investment.

Scott Harkness, head of commercial at Carter Jonas, said the tough labour market means that providing an attractive and sustainable work environment “is vital for the recruitment and retention of talent, encouraging working from the office and promoting the well-being of employees.

Adding: “The overall disparity between the cities suggests there may be opportunities for targeted strategies in sustainability and energy efficiency in these markets, involving local authorities, landlords and investors.”