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A two-tier property market based on energy performance could be less than two years away, an environmental management and compliance firm has said.
Sustainable buildings could see their rental yield reduced by up to 3 per cent and value by up to 16 per cent as a result of changes by the Royal Institution of Chartered Surveyors (Rics) to its Red Book.
The changes, due in April, will link property values to the sustainability of buildings. From then on, the principle of environmental performance commanding increased value will be “common currency”, according to a statement from Envos.
The comments come after a roundtable organised by consultancy Envos and mirror those from a report by Kingston University.
Panellists agreed that initiatives such as the Carbon Reduction Commitment Energy Efficiency scheme (CRC) would start to feed through to property rental values and valuations by quantifying the cost of carbon. This provides one method of helping assess the impact of sustainability on valuation, Envos said.
Jim Green, technical director for Envos, said the likely net effect of sustainability on a building's value will vary widely depending upon its type, location and individual circumstances.
“Kingston University's Sustainable Property Appraisal project in 2006 suggested a range of case studies showing an increase of 3 per cent for a sustainable office in a prime business park to a decrease of 6.9 per cent for an unsustainable unit in a secondary out of town retail park.”
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The majority of new buildings constructed in the European Union and those undergoing significant renovation must prove their high energy efficiency as of December 31, 2020, the EU agreed Tuesday.
Buildings currently generate 36 percent of CO2 emissions in the EU and account for 40 percent of energy consumption in the union.
Representatives of the European parliament and European states decided to revise an existing European law set in 2002 on the energy performance of buildings as part of the EU's major plan to reduce pollution emissions.
Public buildings will lead by example in the new agreement, required to meet the higher standards two years earlier, from the end of 2018.
The new agreement implies a "very significant" recourse to renewable energies, including those produced directly on site.
Each country will set the precise standards of energy efficiency as the task of establishing general norms applicable to both Finland and Portugal, for example, would be too difficult for the EU to implement.
Depending on the materials and designs used, new buildings meeting the efficiency standards require just a fifth of the energy that existing buildings consume on average.
The Independent Environment |
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