• BBP Course Dates
  • Learning Hub Sign-in
  • 0Shopping Cart
Hillbreak
  • LinkedIn
  • Twitter
  • Home
  • About Us
    • Why Work With Us?
    • Our Mission & Values
    • Meet the Team
      • Miles Keeping
      • Jon Lovell
      • Timia Berthomé
      • Sophie Carruth
      • Craig Clark
      • Peonica Fernando
      • Heidi Kruitwagen
      • Alastair Mant
      • Caroline McGill
      • Jessica Moore
      • Lynn O’Halloran
      • Niall O’Shea
      • Sophie Overington
      • Amie Shuttleworth
      • Lisa Starr
      • Matthew Tippett
    • Industry Affiliations
  • What We Do
    • CONSULTANCY
      • ESG Consultancy
      • Strategic Foresight
      • Research & Advocacy
    • TRAINING
      • ESG Training
      • Real Estate Education
      • APC Success
      • BBP Training
  • Insights
  • News
  • Podcast
  • Contact Us
  • Menu Menu

risk ARCHIVE

Tag Archive for: risk

Architecture 1549029 1280

Potential £10bn rental bombshell just twelve months away

April 14, 2017/in News/by Jon Lovell
London – Friday 14 April 2017

Potential £10bn rental bombshell just twelve months away in buildings failing green standards

Research on the impact of new green standards has estimated the value of failing commercial property in England and Wales could be as much as £10bn in annual rents.

The estimate is based on data included in a major new report by global advisory, broking and solutions company Willis Towers Watson, which calls for radical policy measures to green the UK’s building stock.

Willis Towers Watson – Real Estate Climate Risk Report 2017

The report, to which Hillbreak was a principal contributor, contains research by big data firm DealX showing that nearly a fifth of commercial properties in England and Wales are currently failing the Minimum energy efficiency standards (MEES) due to come into force from April next year.

The research has found over 115,000 commercial buildings – 17.5 percent of those rated – in England and Wales have Energy Performance Certificates (EPC) rated F or G. Landlords will be forbidden from re-letting commercial buildings with EPCs below E from next April.

Analysis of the figures by property consultancy Daniel Watney LLP based on the EPC data and the new business rates valuations estimates that the equivalent annual rental value of F or G-rated commercial buildings could be as much as £10bn. Figures released by the Investment Property Forum last year estimated the annual 2015 value of UK commercial property rents to be £55bn.

The Willis Towers Watson Real Estate Climate Risk Report brings together major listed firms and high street names including British Land, Land Securities, Lendlease, NatWest and the John Lewis Partnership to examine how to best bring property up to standard and help the UK meet the targets enshrined in the Paris Agreement, the world’s

The listed firms say that while they can leverage their economies of scale and the latest technology to achieve substantial energy efficiency gains, the key challenge will be to get smaller businesses to green their buildings.

Recommendations in the report for greening real estate include:

  • Government funding for a mass retrofitting programme
  • Ratcheting up the minimum energy efficiency standard to an EPC D rating by 2020
  • The industry-wide adoption of Display Energy Certificates
  • Potentially combining DECs with science-based targets in future legislation to drive ongoing emissions reductions

The report also details the potential harm to real estate if action is not taken to limit climate risk, proposing tougher stress testing and increased translation of climate risk to balance sheets. Many firms are not adequately insured against extreme weather events, as seen in the wake of the UK’s 2015/16 winter floods, which caused £600m in uninsured damage.

Paul Chetwynd-Talbot, managing director of the real estate practice at Willis Towers Watson, said:

“Buildings create 40% of carbon emissions and the fact than one in five properties are falling short of standards is worrying. Investors – many of whom are pension funds – increasingly recognise the risks associated with climate change. But we need to see more affirmative action from Government to help retrofit older buildings and drive forward take up of renewable energy.”

Miles Keeping, co-founder and director of sustainability consultancy Hillbreak, said:

“It is of course impossible to identify the precise value of the total rents at risk due to MEES. But relying on rateable value data gives us a very tangible sense of the money landlords are putting at risk if they do not attend to their EPC-related risks appropriately and very soon.”

Martin Siegert, co-director of the Grantham Institute for Climate Change and the Environment at Imperial College London, said:

“The need to decarbonise our economy is critical. It is going to be a profound change: the developed world will need to have no net carbon emissions by 2050. Ending emissions from our electricity system, manufacturing, transport and supply chains will be challenging enough for our larger companies, but we will need all of our smaller companies to achieve this too.”

Sarah Cary, head of sustainable places at British Land, said: 

“Retrofitting old buildings on a mass scale requires a far more complex solution than simple tax incentives to replace boilers or windows. Retrofitting should be set as a priority for a national infrastructure programme.

“The benefits would be twofold: it would be a boon for job creation, and it would work wonders in helping reach energy goals.”

Paul King, managing director of sustainability at Lendlease Europe, said:

 “We need to make sustainability easier for everyone to engage with – both in terms of consumers and companies. An industry-wide agreement to have LCD screens on the front of every building showing real-time energy use would be more than welcome. Just as with the example of energy labelling on white goods, while it may not directly cause many consumers to switch from one business to another, the incentive to a CEO to avoid having a negative label compared with a competitor could generate real results in driving businesses to retrofit their buildings.”

Caroline Hill, head of sustainability at Land Securities, said:

“Changes in technology and the ability to access growing pools of data have allowed us to set increasingly ambitious commitments to reduce both energy intensity and emissions by 40% per square metre by 2030. If more leading businesses agreed to using 100% renewable power, this could provoke a serious step-change in how society approaches the challenges we face.

“Giving property owners a hard stop deadline to improve buildings or lose the right to rent them out has clearly had some positive effect. Ratcheting MEES so all buildings must be at least D grade by 2020 would provide the impetus for inefficient buildings to get the investment they need.”

Andrew McAllan, managing director of Oxford Properties Group and chairman of the Canadian Green Building Council, said: 

“Most ‘Tier 1’ companies – those with the greatest capital reserves and profits – are by and large already taking the necessary action on making their buildings greener and making more efficient use of energy. It’s that next level down of ‘Tier 2’ companies that need engaging and support. Mandatory reporting of energy consumption would be useful: what gets measured gets managed.

“The best sustainability strategies are built on a foundation of good data, and there are ways of bringing in these measures without making them onerous for smaller businesses. Once you have that compulsory recording in place, smaller businesses then see the easy efficiencies they can make on their utility costs. Combined with something like carbon pricing to add impetus to the need to invest in more efficient installations, that is how we can effect the change we need.”

Richard Garner, head of commercial agency at property consultancy Daniel Watney LLP, said: 

“As our research into the value of England and Wales’ F and G rated buildings shows, many investors in commercial property face a ticking timebomb with their properties being potentially unlettable from April next year – this is particularly the case in the office hotspots of Westminster, Kensington and the City, which have commercial space with a collective annual rental estimate of nearly £800m currently not up to standard.

All the evidence demonstrates that adding sustainable features to offices adds value and drives worker productivity and satisfaction, advantages that will serve landlords well over the long term.”

Jon Lovell, co-founder and director at sustainability consultancy Hillbreak, said:

“It is important that that the government clarifies some of the glaring gaps in the confusing regulations. Many large fund managers and REITs are on top of them, but we have a real concern for the long tail of smaller landlords, businesses and family trusts, who own a disproportionate amount of F&G rated properties and will suffer if they don’t get their acts together very quickly.”

— ENDS —

Contributors to the Willis Towers Watson Real Estate Climate Risk Report 2017 included Hillbreak, British Land, Land Securities, Lend Lease, Oxford Properties, John Lewis Partnership, Nattiest, Hermes Investment Management, Blackstock, Grantham Institute for Climate Change & the Environment and DealX.

 

For more information, please contact Blackstock Consulting / Tyron Wilson / tyron@blackstockpr.com / 07725 197364

Notes for editors

Daniel Watney LLP is not a contributor to the report, but their research on the value of F + G-rated property is based on the DealX data within the report. The rental estimates are based on the latest rateable values used to calculate business rates, calculated using the average rateable value in each local authority and the number of F + G-rated buildings in each district.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

About Hillbreak

Hillbreak is a unique training and advisory firm that helps organisations seeking competitive advantage in a changing urban world. Its mission is to expedite the transition to a sustainable policy, business and investment environment by bringing intelligence, challenge and inspiration to its clients and stakeholders. Please visit hillbreak.com for further information or follow us on Twitter, Facebook, and LinkedIn. 

https://www.hillbreak.com/wp-content/uploads/2017/03/architecture-1549029_1280.jpg 400 600 Jon Lovell https://www.hillbreak.com/wp-content/uploads/2021/02/hillbreak-green.png Jon Lovell2017-04-14 07:00:432017-04-16 19:54:40Potential £10bn rental bombshell just twelve months away
ULI Connect

Jon Lovell…in conversation with ULI Connect

November 21, 2016/in Insights/by Jon Lovell

Jon Lovell, co-founder of Hillbreak, was recently interviewed by ULI Connect, the official newsletter of the ~40,000 worldwide members of the Urban Land Institute (ULI). He discusses the impacts of the Paris Agreement on Climate Change for the global real estate industry, the risks and competitiveness drivers of climate change and evolving market expectations, and what motivates him to challenge convention in the industry.

The interview was prompted by Hillbreak’s recent authorship of the major ULI report, L’Accord de Paris: A Potential Game-Changer for the Global Real Estate Industry.

Jon is a long-standing member of ULI and is currently vice-Chair of ULI UK and chairs its Sustainability Council.

You can read the article here.

https://www.hillbreak.com/wp-content/uploads/2016/11/photo-1442406964439-e46ab8eff7c4.jpg 667 1000 Jon Lovell https://www.hillbreak.com/wp-content/uploads/2021/02/hillbreak-green.png Jon Lovell2016-11-21 21:45:252016-11-28 14:22:42Jon Lovell…in conversation with ULI Connect
Broadgate

Addressing Minimum Energy Efficiency Standards at British Land

April 12, 2016/in News/by Jon Lovell

Hillbreak has recently completed an assessment of British Land PLC policies and systems in relation to the Government’s Minimum Energy Efficiency Standards (“MEES”). The MEES Regulations will restrict the letting of properties which have poor energy performance ratings from 2018, and are a therefore a key issue to address for responsible landlords and their investors.

We conclude that the company is well prepared for the Regulations and has proactively managed potential risks to value, albeit that continued vigilance and proactive risk management is required. An overview of our findings are captured in this blog, published by British Land.

https://www.hillbreak.com/wp-content/uploads/2016/04/broadgate.jpg 600 800 Jon Lovell https://www.hillbreak.com/wp-content/uploads/2021/02/hillbreak-green.png Jon Lovell2016-04-12 17:48:482017-08-04 13:46:09Addressing Minimum Energy Efficiency Standards at British Land
Blur

Investor Briefing on Minimum Energy Efficiency Standards

March 30, 2016/in Insights, Resources/by Miles Keeping

Commercial Real Estate Investors need to ensure that their fund and asset managers are fully prepared to deal with the liabilities that will almost inevitably exist in relation to Minimum Energy Efficiency Standards, and that they have robust procedures in place to deal with these and any future risks. We’ve put this Briefing Note together to guide investors through the key elements and implications of the Regulations, and with the key questions they need to be asking of those mandated to manage their real estate allocations.

Hillbreak Investor Briefing On MEES (Sept 2015)

Hillbreak Investor Briefing On MEES (Sept 2015)

MEES Briefing Note For Investors

This is intended as a high-level and general introduction to the issues. Please contact us if you would like to discuss them in more detail. Hillbreak has helped a number of landlords to consider how factors such as lease type, lease events, tenants, income profiles and regulatory timetables present particular risks to their portfolios which could result in significant income loss, liquidity impacts or capital works being required.  With careful planning, Hillbreak has been able to minimise these types of risk with its clients.

https://www.hillbreak.com/wp-content/uploads/2015/09/blur.jpg 533 800 Miles Keeping https://www.hillbreak.com/wp-content/uploads/2021/02/hillbreak-green.png Miles Keeping2016-03-30 14:00:132016-05-06 11:26:25Investor Briefing on Minimum Energy Efficiency Standards

Keep up to date with Hillbreak

To stay up to date with our news, insights, announcements and events, sign up for our newsletter.

We maintain separate mailing lists.

Hillbreak
APC Success

Latest News

  • Job Listing Deisgn Content LeadNOW FILLED Job Vacancy – Design and Content LeadJanuary 11, 2023
  • Bbp Elective Modules PrBetter Buildings Partnership Expands ESG Training Course with Launch of New Elective ModulesNovember 17, 2022
  • Esg Learning AssistantNOW FILLED Job vacancy – ESG Learning AssistantSeptember 30, 2022
  • Sophie Carruth Alastair Mant Sophie Overington Join HillbreakHillbreak strengthens team with trio of new associatesSeptember 7, 2022
  • Bbp Esg PathwaysBBP launches ESG Training Course for Real Estate AdvisorsMay 18, 2022

Latest Insights

  • Talkin’ ’bout a revolution: greenwash in the firing lineSeptember 7, 2021
  • FloodIPCC 6AR Report: Our AnalysisAugust 10, 2021
  • Empty BusPost-COVID Futures (Real Estate)September 1, 2020
  • The FutureIMPACT FINANCE SERIES: Part IV – The FutureJune 2, 2020
  • The AssetsIMPACT FINANCE SERIES: Part III – The AssetsMay 31, 2020

Press Enquiries

Jon Lovell | Managing Director

jon@hillbreak.com
@lovell_jon
+44 (0)7825 531031

ENQUIRIES


Hillbreak Ltd

enquiries@hillbreak.com

Privacy Policy
Website Terms of Use
Anti-Bribery Statement
Modern Slavery Statement
Complaints Handling Procedure Learning Hub Terms of Use

Menu

  • Home
  • About Us
  • What We Do
  • APC Success
  • Training Diary
  • Insights
  • News
  • Contact Us

What We Do

  • APC Training
  • BBP Training
  • ESG Training
  • ESG Consultancy
  • Real Estate Education
  • Strategic Foresight
  • Research & Advocacy

RICS - Royal Institute of Chartered Surveyors logo

UK Green Building Council Member logo

This website is hosted Green - checked by thegreenwebfoundation.org

Scroll to top

This site uses cookies. You can choose whether or not to accept them here. View settings for specific details about the cookies we use.

Accept all CookiesNo ThanksSettings

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refusing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visit to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Other cookies

The following cookies are also needed - You can choose if you want to allow them:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Privacy Statement
Accept settingsHide notification only