Green Deal Benefits Commercial Landlords

30 April 2013

As property demand declines, the Green Deal could help commercial landlords attract crucial new tenants, a leading energy management company has revealed.

IMServ, one of the UK’s largest independent energy management providers, believes that energy efficiency could be as important to new and relocating businesses as location and cost.

“The last couple of years have not been a good time for commercial property renting or investment,” explains Michelle Giles, Head of Carbon & Energy at IMServ. “The latest surveys show that tenant demand has deteriorated alongside rising supply.

“With little chance of energy costs decreasing and an abundance of available commercial properties on the market, the energy efficiency of a commercial rental is becoming increasingly important to prospective tenants.”

“The tenant can not only choose the location and on-going service but also compare the reduced rates and on-going costs, including gas and electric.”

Plugging Leaky Properties

With an estimated 9 million households facing fuel poverty over the next three years, the Department of Energy and Climate Change (DECC) is currently spending millions promoting the benefits of energy efficiency to property owners across Britain.

DECC wants to plug what it calls “leaky” properties, improving insulation, heating, and energy efficiency.

The Green Deal, which launched at the end of January, provides the opportunity to retrofit properties with Cavity Wall Insulation, Loft Insulation, Solar PV, and more than 40 other home improvement measures.

Green Deal plans, which are available to everybody, provide the upfront capital to make these improvements, and are repaid through a property’s fuel bill.

Energy Efficiency in Business

An energy efficient property can help improve a company’s bottom line, a fact that all businesses will be interested in during the economic downturn.

Reduced energy bills can mean bigger profits, but that’s not all businesses will be looking at. The money saved on energy can also be used to stretch running costs further, generating the potential for more efficient and cost-effective operations. Commercial landlords are being advised to recognise this.

Cavity Wall Insulation, Solid Wall Insulation, Loft Insulation, Heating management systems and improved glazing are just some of the measures commercial landlords can utilise to make their property more appealing to potential tenants.

Residential Landlords Clued Up

Residential landlords have reacted positively to the Green Deal.

Although the whole process appears more straightforward in the residential sector, commercial landlords – who will be obliged to make reasonable energy efficient improvements as of 2016 – are recommended to think carefully before dismissing the scheme.

“There does need to be a shift in attitude amongst landlords,” said Giles. “In the current economic climate, would-be tenants will naturally be drawn to an alternative rental if the landlord has proactively refurbished their commercial property to address energy efficiency.”

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