Commercial property owners warned they must upgrade or face falling demand

The 2011 Energy Act allows for it to become unlawful from April 2018 to rent property that does not meet minimum energy efficiency standards. It is expected that properties will need an Energy Performance Certificate rating of at least ‘E' to comply.

Current estimates supplied by the British Property Federation suggest that up to 20 per cent of commercial properties would not hit the required standard, meaning they would either have to be withdrawn from the market or upgraded to meet the legislation.

Ruth Gilbody, Commercial Director of 4See Environmental, says:

"This means that commercial property owners and investors who do not upgrade their buildings to meet and exceed these standards run the risk of ultimately eroding their asset base and its future potential.

"Tenants are already demanding that the buildings they rent have strong sustainability and environmental credentials. The challenge facing commercial property owners and investors, therefore, is to eradicate the potential negative impact of the changing regulatory framework and to do so in a way that is economically viable over the coming years."

Designed specifically to help policyholders meet these challenges, Zurich has developed a suite of Adaptation Clauses to extend the cover options available; to help policyholders exceed the standards enshrined in current legislation; and to prepare them for future regulation and to future proof their buildings following a loss.

Zurich's Head of Real Estate, Roy Standish, says:

"Increasing environmental and sustainability legislation in the commercial property sector is often seen as a major headache by property owners and investors. However by developing our proposition in this area and bringing real expertise to bear, we are trying to create an opportunity for brokers to help their clients overcome the legislative challenges and better position their portfolios for the future.

"Commercial property owners are under scrutiny and face a raft of obligations and we want to ensure the cover we provide is precisely tailored and ready to meet all these challenges."

4See Environmental are one of a small number of third parties who worked with Zurich on its recent Corporate Focus initiative that they have launched across their business.

The two organisations have received positive feedback by offering brokers and their clients property portfolio assessments, backed up by more detailed surveys, highlighting specific recommendations to keep buildings one step ahead of the regulations.