Tassos Kougionis is a director at McBains
In today’s market, commercial buildings are recognised not only for the income they generate, but for the broader role they play in shaping local economies, investment quality and environmental outcomes. These buildings are no longer just spaces to let: they influence how towns grow, how capital is allocated, and how communities operate.
Recent studies show that sustainability credentials are becoming a clear driver of market performance. A single EPC band improvement can deliver a 1 to 4 percent uplift in rental income or capital value. Green certifications such as BREEAM often attract rent premiums of 6 to 12 percent and capital uplifts of 14 to 21 percent, with some examples showing even greater returns.
These findings confirm what many of us are seeing in practice: buildings with stronger energy and wellbeing credentials are becoming more valuable, more desirable and more resilient. That applies not just to new builds, but also to existing assets, including those with architectural or historical significance.
Against this backdrop, energy performance is now central to how buildings are assessed and managed. Since April 2018, landlords in England and Wales have not been permitted to grant new leases on commercial properties rated below E on the Energy Performance Certificate (EPC). In April 2023, the rules were extended to apply to ongoing leases too, making it unlawful to continue letting buildings rated F or G unless exempt. Another step came in April 2025: all let commercial buildings must now hold a valid EPC at all times. This shifts the requirement from a one-off check to an ongoing legal duty.
Government policy is also advancing. In 2021, the Department for Business, Energy and Industrial Strategy proposed raising the minimum requirement to EPC C by 2027 and EPC B by 2030. While the formal response to that consultation is still pending, in April 2025 the Department for Energy Security and Net Zero confirmed an update would be published by the end of June. Officials have indicated that future rules will be designed to balance ambition with practical delivery across the sector.
The scale of potential improvement is significant. According to data from the Valuation Office Agency and BEIS, England and Wales have around 400 to 450 million square metres of commercial floorspace. In seven major cities, including London, Birmingham and Manchester, a recent British Property Federation study found that 83 percent of commercial buildings were rated below EPC B. This suggests that over 170 million square metres of space could benefit from energy upgrades.
Much of this stock is already reaching key lifecycle moments. Services may be nearing the end of their design life. Occupier needs are shifting. General refurbishment or reconfiguration is often due. These are natural points at which to consider energy performance improvements. A technology-neutral review of the asset, considering systems, layout, use, condition and regulation, helps identify the right opportunities.
From there, value impact analysis can guide planning. This process explores how different retrofit approaches align with investment plans, lease cycles and occupant needs. It combines scenario testing, cost planning and risk management. Frameworks like PAS 2038 provide practical structure to this process, helping ensure upgrades support long-term performance.
The wider economic environment reinforces the need for this kind of thinking. Construction and material costs remain high. Fuel prices have been volatile, with diesel prices in Europe rising more than 10 percent in June 2025 due to geopolitical instability. Delivery times and supply chains remain under pressure. In this context, buildings that are well-performing and cost-stable are easier to manage and more attractive to investors.
Other regulations are also shaping the future. The Building Safety Act is raising standards for design, maintenance and handover. The new building regulator is reframing how owners and dutyholders manage long-term safety and operational risk. National strategies for energy use, housing and net zero are reinforcing a direction of travel toward higher-performing buildings across the board.
Properties that meet Minimum Energy Efficiency Standards (MEES) requirements but also align with wider quality frameworks like BREEAM or WELL often outperform their peers. They attract tenants more easily, achieve better terms in funding and insurance, and reduce exposure to future compliance issues. In my own work, I’ve seen how lifecycle cost modelling, Choosing by Advantages and structured decision tools help unlock both performance and long-term value in retrofit projects.
Financial institutions are also responding. Banks and insurers increasingly prefer buildings that are future-ready and demonstrate strong operational control. These assets are seen as lower risk, more adaptable and better aligned with ESG goals. A further change is expected in 2026, with EPC methodology reform likely to place greater emphasis on real-world energy use. This will make performance more transparent and bring design and operation closer together.
MEES is not just a minimum legal standard. It is part of a wider shift in how we define quality in commercial real estate. Buildings that combine energy strategy, occupant wellbeing, capital planning and operational reliability will lead the way. They will be more stable, more investable, and more valuable in the years ahead.
This article appeared in the July/August 2025 issue of Energy Manager magazine. Subscribe here.