Legislative demands are driving the need for buildings in the UK to meet carbon emission targets over the next decades but there isn’t yet a clear answer on whether green buildings can command a premium, reveals new research from Bidwells.
‘Is There A Green Premium?’ which has just been published – and previewed at the recent Retrofit Conference held at Queens’ College, Cambridge – sets the scene in terms of the huge challenge retrofit will pose over the coming years.
The report states that the scale of the challenge is daunting. For the UK to hit its national carbon reduction target of 80% by 2050 almost every building in the country will need a low energy makeover, which means one building has to be improved every minute.
The research highlights the fact that commercial property is lagging behind the residential sector and presents the greater challenge as it is fragmented. There are currently 1.4 million commercial properties in the UK to deal with.
Key barriers for commercial retrofit are quoted from a 2014 survey and include: economic (cost and value), organisational, lease structures/legal, physical/technical, landlord/tenant relationship, data measurement and policies.
Whilst residential is leading the way, with all new-build having to conform to EPC ratings, this sector will still present a challenge. Over 80% of the 2050 housing stock has already been built, there are around 8.5 million dwellings more than 60 years old. In total over 25 million properties will need a degree of retrofit by 2050.
A major contributor to the task ahead is emissions which are described as a ‘huge issue’. Energy and emissions vary dramatically with building type – and most landlords have yet to complete an energy/emissions audit. There have been recent improvements in the total number of emissions but the research concludes that this reduction is likely to have been driven by the banking crisis/recession rather than a lowering in real terms.
Ian Peck, Partner at Bidwells who presented the research at the recent Retrofit Conference said: “So is there a green premium? It’s a big question and we don’t have an answer – yet. There is no reliable, long-term evidence of a green premium in the UK – although there appears to be more in the residential market than commercial.
“However we do know how the market perceives the key benefits of green building from a 2012 survey: lower operating costs, higher building value, certification/accreditation, future proofing, tenant education, higher rents, tenant productivity and higher occupancy rates.
“There’s no doubt that Retrofit has yet to take hold in the commercial market although awareness, accreditation and attitudes are gradually shifting. Some people have likened it to the building equivalent of the seat-belt, requiring a sea-change in attitude which will need to happen to meet the current targets set”.