Britain’s commercial building sector looks set to miss the 2030 deadline for all non-domestic rented properties to achieve an EPC rating of B or higher due to current low rates of energy efficiency improvements.
Research indicates more than 13,000 such properties in England and Wales remain rated F or G and at current rates, it would take until 2040 to meet the target.
These are the findings from property data firm Search Acumen, which found the issues despite the introduction of Minimum Energy Efficiency Standards (MEES) in April 2023, which ban the leasing of commercial properties with an EPC rating below E.
In 2021, the Government launched a consultation aimed at raising the minimum standard to EPC B by 2030 for privately rented non-domestic buildings. However, under the Conservative Government, no formal plan was published, and no formal confirmation of the target followed.
The current Labour Government has announced it will provide an update, expected alongside its Warm Homes Plan, later this year.
However, the research says that not only is the sector falling behind on energy efficiency initiatives, but the pace of progress is slowing – something Syntegra Alan Wing-King MD hopes will pick up again as a matter of urgency.
Last year, the target was expected to be missed by eight years. Now, that gap has widened to ten, as the pace of energy efficiency upgrades slows across much of the market.
Alan said: “This is a very disappointing update and one we are keen to see reversed as soon as possible.
“We cannot allow the focus to shift from the built environment and its role in improving energy efficiency measures.
“I cannot emphasise enough that many efficiencies can be factored in at relatively low cost and the benefits are enormous – for individual landlords, companies and, of course, the environment.”
The research highlights that, in 2024, improvements to A-B rated properties dropped by 20% compared to the previous year. Search Acumen’s managing director, Andrew Lloyd, said: “Real estate owners and investors have faced a barrage of economic and financial challenges over recent years and inevitably this will have had some impact on the appetite for investment in costly retrofits. “Despite these dynamics, the mission to decarbonise needs to remain constant, both to lower the environmental impact of the built environment, but also to ensure commercial sustainability for real estate portfolios. 2030 really isn’t that far away.” Sectoral progress The office sector remains the worst performer, with 5,761 buildings still rated F or G and only 15% meeting the target EPC bands. The hospitality sector leads with 31% of its properties rated A, A, or B. Retail now has the lowest share of non-compliant buildings at just 0.54%, while education has also seen progress—cutting F and G ratings to 1.8% and lifting A*-B ratings to 19%, a 7% rise since last year.
Across all industries, new registrations of low-rated buildings declined by almost 7%.
Alan added: “There are many exciting innovations in the construction and commercial buildings environment around sustainable practices so it is disappointing that they are not being implemented at scale.
“We all know the built environment is a major contributor to carbon emission levels and it is frustrating to hear that while more could and should be done, the importance of tackling the problem appears to have lost some momentum.
“Hopefully this is a short-lived trend and it will be given its priority standing again before long. Companies like mine stand ready to help organisations achieve their new, improved, gradings.”
Commercial property retrofit challenges
The decarbonisation challenge in British real estate is compounded by the sheer scale of non-compliance.
In September of last year, research from global real estate adviser Knight Frank found that around 70% of UK commercial floor space is currently rated EPC C or below.
To stay on track for the 2030 deadline, the rate at which properties improve to a B rating or higher would need to more than double, from 8% per year to 18%, noted the report.
In London, just under half of office space currently meets the target, meaning more than 12 million square feet still requires upgrades. Similar patterns are emerging in other major UK cities, where up to 65% of office space on the market remains below the expected standard.