As published in Property Week on 20 February

It is no secret that there is pressure on investors to ensure the assets in their portfolios are MEES (minimum energy efficiency standards) compliant. However, we are still seeing too many taking a short-sighted view and preparing properties for possible interim 2027 targets, instead of planning ahead for 2030.

Part of the problem is that there is still an element of the unknown when it comes to what EPC rating needs to be achieved and by when. Changes have already been made to the rules regarding residential properties and some predict a similar moving of the goalposts will take place for commercial real estate. Do you really want to be hedging tens – and sometimes hundreds – of millions of pounds on a bet though.

There are a surprising – and some might say frightening – number of buildings still without an EPC rating, or with an out-of-date rating. As an industry we need a change of mindset that places EPC assessments as a priority piece of due diligence in protecting the value of an asset. The certificate itself may just be a piece of paper with a number on it, albeit one that determines whether or not that building can be leased out or not. The process of assessment to get to that rating, however, should be a key factor in determining what investment is made into building upgrades and when. Undertaken as part of a wider suite of assessments, such as a Planned Preventative Maintenance report, landlords and their asset managers and facilities managers can then create a comprehensive strategy for building improvements.

2030 may seem a long way off, but undertaking a draft EPC assessment now allows you to be fully apprised of what energy efficiency improvements need to be made in the coming years in order to be MEES compliant and achieve the correct rating when it matters.

At Hollis we have found that more and more of our clients are working with us to take a more holistic approach to their building assessments. They understand the benefits of utilising our surveying teams in a time and money efficient way. As a result, we are increasingly carrying out EPC assessments alongside PPM assessments and producing collaborative reports that tie carbon reduction measures in with long term PPM scheduling. For the client this has many advantages.

A PPM schedule looks at the whole building and makes considerations relating to ‘end of life’ of both the building fabric and the mechanical elements within the building. If we are assessing a property’s boiler and heating system and predicting when improvements will need to be made, it makes sense to look at the same heating system and recommend suitable changes to make it energy efficient. Rather than replacing like for like, can it be replaced by an air source heat pump and how feasible would it be to install one? We will also look at what a specific lease term might say about end-of-life replacement and whether or not sustainable upgrades can be covered within the service charge.

A detailed and thorough PPM schedule is a really sophisticated document that is data heavy, and it usually needs someone to be able to prepare that data in a simple to comprehend way. We break down that data for clients to access via our portal so that they can, for example, easily monitor energy usage and track the performance of a building. Using the same data, our Facilities Management Consultancy team can then advise on when works are likely to be needed to be carried out over the next ten years. Or in the case of improvements needed for MEES compliance, over the next six years.

One of the biggest challenges we face is planning for improvements that will future-proof a building. Technology is developing faster than it ever has before. There is little point planning future works using today’s technology. We need to be thinking about what new technologies are going to be available in the coming years and assess how they might fit into a programme of planned works.

Predicting which way targets are going to go and how the goal posts will shift in the coming five to ten years is an almost impossible task. Understanding what needs to be done to get a building or a portfolio of assets into the correct state, in order to be MEES compliant at the time it needs to be, is much more feasible. As is creating a plan that manages expenditure and protects the value of an asset in the short and long term.