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The impact of
energy certificates on the investment market and the growing need for
investors to assess the environmental footprint of their property becomes
even more apparent. From October 2008 new rules come into effect that will
allow investors and occupiers to compare the energy efficiency of
buildings.
These rules will be introduced by all European member states by
2009. Energy certification is being introduced in the UK under Part L of
the National Building Regulations, and forms part of the Energy
Performance Of Buildings Directive (EPBD) which is an EU initiative.
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Certification
will raise awareness of energy efficiency in the commercial property
sector in a number of ways;
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The
system will be visible, quantifiable and mandatory.
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The
system will enhance transparency, and provide a benchmark for both
building and end-user.
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The
system will enable the energy efficiency of buildings to be compared.
These factors
will change the view of investors in the commercial property sector, due
to sustainability issues and costs of utilities to service those
buildings. As sustainability issues rise up the corporate agenda and
companies place greater emphasis on corporate social responsibility
policies, investors will question the environmental footprint of their
property portfolios.
See also Social
Housing.& Property Rental Energy
Certificates.
An EPC provider can assist in the provision of
energy inspection services and the issue of certificates for rented
accommodation. A domestic energy assessor cannot issue an EPC for
commercial or public buildings, these can only be issued by approved commercial
energy assessors.
Investors
will be keen to find energy efficient buildings due to the potential
returns they offer. The most important factor is the threat to the value
of an energy inefficient buildings due to accelerated obsolescence,
considerable resources may be required to bring these properties up to the
latest standards.
New Build
homes require Energy Assessment by an authorised energy inspector, refer
to SAP
Energy Assessors New
Build EPC for further information.
Buildings
which are classified as "Commercial" require inspection by
qualified Energy Assessors, for further information relating to energy
assessment of property in this sector please refer to Commercial
Energy Assessors
These types
of investments need to generate positive returns over a prolonged period,
between 20 and 50 years for commercial buildings. The owners of these
properties must anticipate potential changes to occupier demand over time.
Demand for
space in the occupier sector of the market will become more sensitive to
energy efficiency, and buildings that achieve high SAP (Standard
Assessment Procedure) performance ratings will attract stronger demand. In
contrast, those properties considered to be "unsustainable"
assets are more likely to become less desirable to tenants. The impact of
sustainability on the rental and capital values will depend in part on
market conditions. In the current market there is stong demand and good
stock is scarce, there is little differentiation between different kinds
of product. Over time, energy efficiency of commercial property will
increase in importance, increasing rental growth and higher capital gains
for "sustainable" buildings will lead to stronger growth in this
sector. Sustainable property is likely to lead to lower tenant turnover
and shorter vacant periods.
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Investors may
need to invest further cash resources to enhance their
"unsustainable" assets in the market place. In this environment
"sustainable" assets would be more liquid than their
"unsustainable" counterparts. It is probable that a 2 tier
market will develop, where energy efficiency will be considered as
"prime space".
Eventually when buildings have been surveyed to
determine their efficiency ratings and the data collated in a central
database this information could be made available to property appraisers.
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Large, and complex building structures will require assessment through a
principle known as "SBEM" specialised companies undertake this
type of work - refer to SBEM
Energy Assessment for more information.
However, as the demand for sustainable buildings expands, this may change
in the longer term, it is possible that a significant adverse yield impact
on energy inefficient buildings may become evident, as a result of lack of
rental growth prospects. The legislative and social context for investing
in commercial property is changing, and the introduction of the EU
Directive (EPBD) represents just one area that will affect landlords,
tenants and owners of property portfolios.
In order to
assess a properties performance and gain an energy rating certificate,
owners of industrial or commercial property must enlist the services of an
energy assessor who will conduct a survey using the full SAP methodology.
The inspector must be licensed and accredited by a professional body.
Further
Reference:
Energy
Ratings
Energy
Assessment Ratings for New Build Property
Energy
Assessment Ratings for Existing Property
Where
can I find a Commercial Energy Assessor?
Training
& Accreditation Energy
Performance Certificates (EPC) have the potential to change the commercial
property
market in a profound way. Shrewd investment in the current climate may
well prove lucrative in tomorrow's future.
Owners of commercial, industrial & public premises will need to find out if their
building is affected by the new legislation, refer to: Does
My Building Need An Energy Performance Certificate?
Energy
assessment of these buildings is already underway and the timetable
for the deadline for EPC's has been established.
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Commercial premises and public buildings, must be inspected by an
authorised SAP Assessor, energy
calculation for these types of buildings differ from domestic property. Full
SAP or SBEM methodology is used for industrial premises.
Currently,
property landlords will require an energy certificate for properties from
October 2008. Owners can voluntarily provide a certificate up to the
proposed deadline, after this time an energy certificate will be
mandatory. See also landlords and
tenants for more information.
For landlords who own property that is rented to tenants, an EPC is
required from October 2008 for more information refer to Landlords
EPC
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Commercial
Property Energy Assessors Energy Performance Certificates EPC Property
Inspectors DEC Providers- For commercial property inspectors,
buildings inspectors, energy performance certificate DEC (EPC)
providers.
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