Sustainability

Question 1

What is sustainability?

Answer 1

Meeting the needs of the present without compromising the ability of future generations to meet theirs.

Question 2

What are the three pillars of sustainability?

Answer 2

Brundtland report: social (health,human rights, working conditions), economic (use of natural resources), environmental (global warming, pollution, climate change, recycling etc)

Question 3

How can property be sustainable?

Answer 3

Whole life considerations - inclusive environment, natural light, green/sustainable materials, shape and size optimal, local labour/resources used and supply chain minimised

Question 4

How is sustainability measured in commercial property?

Answer 4

EPCs / MEES, BREEAM, SKA, WELL, LEED

Question 5

What is BREEAM?

Answer 5

Building Research Establishment Environmental Assessment Method. 5 ratings - pass to outstanding. Can measure new or refurbed buildings.

Question 6

What is SKA?

Answer 6

Led and owned by RICS - rates and compares fitout of commercial property.

Question 7

What is LEED?

Answer 7

Leadership in Energy & Environmental Design - used in USA. Alternative to BREEAM.

Question 8

What is WELL?

Answer 8

Monitors wellbeing in occupational use - inc. natural light, air quality.

Question 9

What is an EPC?

Answer 9

Energy Performance Certificate. Valid for 10 years, required when selling or letting commercial property. Consists of rating and recommendations for improvement.

Question 10

When is an EPC required?

Answer 10

All commercial properties being sold or let with certain exemptions. Should be requested before marketing, provided no later than 28 days into marketing campaign.

Question 11

What are the exemptions for EPCs?

Answer 11

Temporary buildings used for 2 years or less, places of worship, low energy industrial buildings, detached buildings smaller than 50m2.

Question 12

What are MEES?

Answer 12

Minimum Energy Efficiency Standard. All properties with rating less than E cannot be let; all existing leased properties must be E or above by April 2023. Government require B by 2030.

Question 13

What are the exemptions from MEES?

Answer 13

If all recommended improvements have been made but still below E; if improvements devalue by 5% or more; unable to obtain superior consent for improvements.

Question 14

Can MEES improvements be made with service charge funds?

Answer 14

No.

Question 15

Is there a premium for buildings with a better EPC rating?

Answer 15

Depends on the comparables but in my experience no.

Question 16

What guidance does the RICS give on sustainability relevant to your practice?

Answer 16

Guidance Note Sustainability in Commercial Property Valuation.

Question 17

How might you advise a landlord in relation to MEES?

Answer 17

Have a compliant EPC; put steps in place to improve soon; have yielding up clause linked to MEES if possible; any compliance works undertaken by tenant as an obligation to landlord.

Question 18

What building components are sustainable?

Answer 18

Photovoltaic panels - convert sunlight into electricity/heating.
Rainwater harvesting - capture rainwater for irrigation/WC flushing.
Infrared sensors - control lighting in relation to demand.

Question 19

Why would occupiers look for sustainable buildings?

Answer 19

CSR objectives; better for reputation, recruitment and retention; reduction in costs in some cases.

Question 20

Why would investors look for sustainable buildings?

Answer 20

Occupier demand; increase in legislation (MEES) so lower risk over time. Internal CSR policies also.

Question 21

How would you advise an investor in regard to sustainability?

Answer 21

Consider works required to bring to MEES standard and factor into purchase price (DCF?)

Question 22

What are some local and national sustainability goals?

Answer 22

UK’s commitment to achieve net zero greenhouse gas emissions by 2050, and Manchester’s target of 2038.

Question 23

What are the penalties for non compliance with MEES?

Answer 23

The penalty for renting out a property for a period of fewer than three months in breach of the MEES Regulations will be equivalent to 10% of the property’s rateable value, subject to a minimum penalty of £5,000 and a maximum of £50,000.
After three months, the penalty rises to 20% of the rateable value, with a minimum penalty of £10,000 and a maximum of £150,000.