New analysis from Colliers shows that only approximately 20% of central London offices can be classed as A and B on the EPC rating scale, with the majority (57%) falling into the D to G categories.
It also found that 10% of London’s office stock may become unusable in 2023 due to low EPC rating.
Tom Wildash, co-head of the West End Leasing team at Colliers, said: “London’s landlords are going to have to take a long hard look at their stock and need to take action now to bring their space up to a higher standard.
“One benefit of the pandemic is that it has brought the environmental and wellness credentials of offices to the fore amongst investors, owners and occupiers alike. It is imperative that those owners of offices with low EPC ratings spend the next 18 months on comprehensive refurbishment plans to avoid being left behind and unable to attract new tenants. With a lack of new build stock in the pipeline and a growing level of demand for best in class space, the refurbishment of London’s offices could do a lot to ease this supply/demand equation.”
Guy Grantham, London Research director at Colliers, added: “There is evidence of appetite for refurbished space which is encouraging for landlords and developers looking to upgrade existing stock. There is also a mismatch between supply and demand as when looking at the overall delivery of development space by square footage in 2018-2020, refurbished schemes only accounted for 23 per cent of the market.
“Hopefully this number will increase as the EPC deadline looms. There is also plenty to be said for far better green credentials of refurbished space as opposed to demolition and complete rebuild from the ground up, the recycling of existing stock offers stronger green credentials in the short to medium term than potentially newly built BREEAM Outstanding projects.”
