Up to 65 million m2 of commercial floor space in the UK may need to undergo an energy efficiency overhaul by 2018, according to the latest 'Opportunities in Green' report released by Savills.

The real estate consultant suggests that the issue of a requirement to upgrade private rented properties to an Energy Performance Certificates rating of grade E or above will be most pertinent in London. Due to a large number of lease renewals anticipated to come to the market in the next five years, landlords left with vacant space would be advised to take the opportunity to improve the energy performance of their property. According to DECC (Department of Energy & Climate Change) 62% of non domestic properties are rented and of this figure 18% have a rating below grade E.

'If the legislation goes through, leasing of a sub grade E standard property will become unlawful from April 2018,' noted Michael Pillow, director of Savills building consultancy. 'Although upfront payment issues to enable energy consumers to improve their property are considered within the Government's proposals under The Green Deal financing framework, in practice there are many issues still to be resolved such as recovering charges incurred during void periods or in multi tenanted properties which could raise concerns and needs close examination.'

Going beyond basic levels of refurbishment can reduce void periods in a property as firms are increasingly showing a preference for greener buildings. This may not directly translate into a higher rental premium but it will improve the long term investment value of a building, Savills said. 'Its the avoidance of the ‘brown’ discount rather than the hunt for the ‘green’ premium that will drive investors/landlords to improve the efficiency of their portfolio,' commented Marie Hickey of Savills research team.