Commercial property value threatened

Impending legislation to grade the energy efficiencies of buildings will cause a dramatic fall in the capital value of commercial property in the UK, according to research by architects Gensler.

The report, Faulty Towers: Is the British Office Sustainable, reveals that 75% of property developers believe the new legislation will have a negative impact on the value and transferability of inefficient buildings when the certification is imposed from 2007.

The report also found that 72% of company property directors believe that business is picking up the bill from badly designed, inefficient buildings. More than a quarter (26%) state that bad office stock is actually damaging UK productivity.

"Property fund managers are effectively sitting on an investment time bomb," said Gensler managing principal Chris Johnson. "The introduction of energy performance certificates will shorten the lifespan of commercial buildings constructed before the new regulations, and we expect the capital value of inefficient buildings to fall as a result."

[Contract Journal, 30 August 2006, p 4]