Preparing for the shift to EPC B in commercial real estate.

Later this year, the Government is expected to confirm an increase in Minimum Energy Efficiency Standards (MEES) for commercial buildings, raising the minimum Energy Performance Certificate (EPC) rating from E to B. This is the first of two articles where we look at the context, to be followed by how we approach and facilitate the technical side.

The most likely implementation window now falls after 2030 but before 2035. Although the precise details - exemptions, phasing, and enforcement - are yet to be announced, the direction of travel is clear.

The UK’s Seventh Carbon Budget calls for an 87 per cent reduction in emissions from commercial and public buildings by 2040, and tightening MEES is one of the most direct levers available to achieve that target.

For commercial landlords, developers, and investors, this represents a major regulatory step change, one that could determine the future usability and value of a significant proportion of the nation’s property assets.

From Awareness to Action

The market is widely aware of what’s coming. Industry research indicates that around 60 per cent of the UK’s commercial property stock currently sits below the EPC B threshold.

Many developers and asset managers have carried out preliminary portfolio audits to understand exposure. Some are using lease events, rent reviews, and refurbishment cycles as natural points to implement upgrades, while others are updating lease wording to include stronger sustainability clauses that enable improvement works and clarify cost responsibilities.

Yet, despite this growing awareness, action remains uneven. A large proportion of owners appear to be waiting for official confirmation before committing capital expenditure. Those holding long leases often perceive little immediate pressure to act, while others are hoping that cost-effectiveness exemptions or revised thresholds may ease their obligations.

The result is a market that understands the challenge but risks being underprepared when regulation tightens.

“The market knows what’s coming — but awareness without action could leave portfolios stranded.”

The Cost of Caution

Deferring action may appear pragmatic, but it carries escalating risks. Once the new threshold is confirmed, non-compliant buildings will become unlettable. Delayed investment could therefore create a wave of stranded assets and eroded capital values.

Cost inflation is another concern. As the deadline approaches, competition for qualified contractors and materials will intensify, driving up prices and extending timescales.

Tenant expectations are also shifting quickly. Many occupiers now regard energy efficiency and low-carbon performance as non-negotiable. Properties that fail to meet these expectations will find it harder to attract or retain quality tenants, well before legislation forces compliance.

There are legal and contractual implications too. Sustainability clauses are becoming more common in leases, and landlords who have not planned for MEES-related works may face disputes over service charges, access rights, or dilapidations.

In short, waiting for clarity may offer short-term comfort but creates long-term exposure.

A Strategic Opportunity

For proactive landlords, the tightening of MEES offers an opportunity rather than a constraint. Early investment in energy performance can safeguard income streams, enhance value, and strengthen tenant relationships.

Re-assessing older EPCs issued before 2022 can even yield immediate improvements, as the updated calculation methodology sometimes delivers higher ratings without physical works.

Integrating upgrades into planned maintenance or refurbishment cycles is often the most efficient route. A phased strategy, aligned with lease expiries or tenant fit-outs, enables owners to spread costs, manage disruption, and capture operational savings sooner.

At a portfolio level, embedding MEES compliance into acquisition, disposal, and asset management strategies ensures that energy performance becomes a consistent driver of decision-making rather than an afterthought.

“Early investment isn’t just about compliance — it’s about protecting long-term value and attracting tomorrow’s tenants.”

How Chetwoods Can Help

At Chetwoods, we are already working with clients across sectors to anticipate and adapt to forthcoming standards. Through our Studio / Thrive / Works framework we combine design creativity, sustainability leadership and digital intelligence to deliver integrated, practical solutions.

Next Steps

Our Architects are advising developers, landlords and investors to review their portfolios, refresh EPC data and prepare retrofit strategies now, well ahead of formal confirmation. Starting early enables smarter investment, smoother delivery, and stronger positioning in a market where sustainability credentials increasingly define value.  In our next article we will look at the technical approach in more detail.

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