Nearly a fifth of UK office space is likely to be unlettable to the majority of occupiers unless it is upgraded to comply with MEES legislation, according to a new report produced by Carter Jonas.
In its ‘Offices: Past, Present, Future – the Sustainability of Office Stock’ report, Carter Jonas analysed four key metrics – EPC ratings, BREEAM assessment, office-grade classification and age of office stock – nationally and across 12 major UK office markets.
Its research found office properties within EPC bands F and G account for 17.2% of all offices in Great Britain, meaning that nearly a fifth of all office buildings potentially became unlettable from 1st April 2023, unless remedial action has been taken to upgrade the buildings.
Furthermore, only 31.6% of the UK’s office stock is band C or better – the minimum proposed MEES standard by 2027 – and only 8.3% of the stock would satisfy the proposed minimum MEES requirement of an EPC B rating from 2030, unless upgraded.
In Carter Jonas’s newly developed Office Market Sustainability Index comparing the average sustainability level of office stock across 12 UK office markets, London came top, followed by Leeds and Manchester.
Scott Harkness, head of commercial at Carter Jonas, said: “Our research highlights the challenges facing many commercial property owners, particularly of older or low-quality space. This is not to say that ageing and unsustainable stock doesn’t have a role in meeting occupier demand.
“Repurposing older office space can help reduce the need for new construction and promote sustainable urban development, particularly when considering factors such as the embodied carbon contained in existing buildings and the environmental benefits of reusing existing structures. But, moving forward, much of its relevance will be defined by how proactive landlords and developers are in responding to legislation and the requirements of the modern workforce.”
He added: “Occupiers are demanding office space that meets increasingly high sustainability criteria. This is partly being driven by MEES, but additionally, in the current competitive labour market, providing a vibrant, 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; however, our findings highlight significant variations in quality and sustainability characteristics among the key UK office markets.
“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. A key question will be the extent to which market forces alone will drive this transformation without the need for further government intervention.”
