As much as 128m sq ft of UK warehouse space will fail to meet minimum EPC requirements by 2027 unless upgraded and risk becoming unlettable, according to data from Knight Frank.
The company found 18% of all units above 50,000 sq ft do not currently meet minimum EPC requirements, with circa 404m sq ft – or 60% of UK warehouse space – failing to meet the minimum EPC B requirement by 2030.
In Wales, just 24% of warehouses over 50,000 sq ft meet the EPC B grade minimum, with marginally higher rates in the North East (33%), North West (39%), and Yorkshire and The Humber (40%).
BREEAM certification is increasingly becoming a key consideration for developers and logistics firms. Over the last decade, the number of BREEAM-rated industrial buildings has consistently grown, with 1,411 buildings I&L buildings receiving BREEAM certification and the majority (62%) receiving a Very Good rating.
Charles Binks, head of logistics and industrial at Knight Frank, said: “Occupier demand is becoming increasingly focused on high-quality facilities that can offer ESG credentials. Operators are increasingly discounting facilities that do not fit with their, or their customers’, sustainability strategies. While newly constructed warehouses generally meet top sustainability standards, 82% of the UK’s existing stock built before the year 2000, do not meet minimum EPC requirements.
“It is obvious that significant capital expenditure is required to retrofit these warehouses and mitigate obsolescence risk, however just 6% have undergone upgrades in the past five years. The prospects for rental growth should offer incentive. However, investors must accelerate the rate at which older facilities are upgraded or they will become unlettable.”
