Why make a Commercial Property Portfolio more sustainable?

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We’re all thinking and living greener. From how we work to how we live, we’re considering the environment as we turn the taps off while we brush our teeth and swap to energy-efficient LED bulbs in the office.

With the government’s target to reach carbon net zero by 2050 and daily news reports reflecting the impact of climate change on the world, it’s clear that we need to think sustainably if we’re to combat the changes to the environment.

As someone who owns a property portfolio, you’ve likely been thinking of ways to introduce sustainable elements to your commercial buildings.

Here are some ideas to help make these changes.

Why make Commercial Spaces green?

There’s been a surge in demand for greener commercial spaces in the last few years. Established properties have been updated and new builds have sustainable features listed as part of the building plans. This involves using sustainable materials, including alternative energy and renewables.

As well as helping the planet, choosing a more sustainable path for your portfolio is potentially lucrative. Many companies that are looking for offices to rent will have green targets to meet, so they’re looking to work from a space that matches these values.

This means that yields are likely to be higher as you can ask for more to account for the sustainable elements of your portfolio.

What’s already in place for Commercial Properties?

Currently, there are certain boxes you must tick in terms of offering environmentally sound properties to your commercial tenants. Energy performance certificates (learn more via commercial EPC) ensure that you are transparent about energy consumption in each property. This is something that you must make available to both current and potential tenants so they can see how much energy is being used.

Similarly, you must make sure that each property in your portfolio meets minimum energy efficiency standards (MEES). This means commercial landlords can’t renew existing tenancies or grant new ones if the building has less than the minimum EPC rating of E. From April 2023, the requirements of this standard are even tighter. Here, landlords must not continue to let any buildings which have an EPC rating of less than E.

The landlord can register an exemption in both instances, but potential tenants are likely to be put off without this information.

How to make your Portfolio more sustainable

There are several ways to make a property more sustainable. These can be simple home improvements and updates or those that require a little more work.

First, switch to renewable energy sources. With gas boilers potentially being banned by the government in the coming years, now is the time to look at making the switch to energy-efficient resources in your properties. Solar panels and heat pumps, for instance, could be viable options.

Also, introduce electric vehicle charging points around your commercial spaces ahead of the ban on the sale of new petrol and diesel cars coming into effect in 2030.

Whatever updates you make, it’s worth considering protecting your properties. Commercial landlord insurance could give you the cover you need and may offer peace of mind should things not go to plan.

Why Investment in Green Spaces is good long-term

Both your reputation and your capital as a property owner and manager can benefit from going green. By leading the way on sustainable properties, you could become a go-to choice for those seeking commercial premises. This can help both in terms of making money and building your brand.