Rising sustainability requirements threaten to leave hundreds of millions of square feet of warehousing assets stranded in UK

New EPC ratings threaten viability of up to 404m sq ft of UK warehouse lettings

Real estate consultancy Knight Frank has warned that up to 404m sq ft of warehouse space in the UK could be unlettable by 2030 due to the new EPC ratings.

From 2027, properties with an EPC raging lower than ‘C’ will be liable for big fines.

In 2030, this minimum requirement will be raised to a ‘B’ rating.

“Operators are increasingly discounting facilities that do not fit with their, or their customers’, sustainability strategies,” said Charles Binks, head of Logistics and Industrial at the company.  “While newly constructed warehouses generally meet to sustainability standards, 82% of the UK’s existing stock built before the year 2000 do not meet minimum EPC requirements,” he continued.

Significant expenditure will be required to upgrade these warehouses but, so far, just 6% have been retrofitted. The rate of work must be accelerated to avoid older facilities becoming unlettable. The pressure of general rising costs has made retrofitting a lower priority recently but this approach may not be tenable for much longer.

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