“Stranded” London office assets – really?

• 14 May 2026
• Views
• Commercial real estate
,
• Sustainability

“Thousands of London offices “risk obsolescence””…

“Landlords will struggle in the new regulatory environment given the “huge scope” of the challenges ahead”…

“A two tier office market”…

This article in Bloomberg is a reminder that despite the stark warnings, we don’t have any “new” energy efficiency rules for commercial buildings. There is no EPC B or EPC C requirement, despite the initial 2021 consultation proposals. We don’t know when DESNZ may make a decision, nor what that might be. As of February this year, according to DESNZ: “We are reviewing the consultation responses, making sure they are fair and proportionate and will update in due course” (see here). Five years on I don’t sense any urgency or conviction…and this is all in a legislative environment, where if the Government opts to act, it can move very quickly (e.g building safety, renter rights, ban on upwards only rent reviews). Clearly, priorities are elsewhere…

So are all these warnings misplaced? Will we ever see more use of the legislative “carrot” on energy efficiency? My prediction – we will not have any “new” rules in the near term (rumour has it that the Treasury fears the economic impact and will not bless anything).  I suspect we will be in the same place in 5 years’ time. 

That is not to say there is no polarised market, driven in part by the energy efficiency of buildings. There is no doubt that the quote below is, in part. true. However it is occupiers that are voting with their feet. I don’t think it is a question of “compliant/non-compliant” stock. 

As demand increasingly concentrates on high-performing, energy-efficient buildings, the market is becoming more polarised,” it said. “Assets with strong sustainability credentials are commanding premium rents and values, while older, non-compliant stock are generating significantly lower rents and seeing longer void periods"

https://www.bloomberg.com/news/articles/2026-05-12/thousands-of-london-offices-risk-obsolescence-under-new-green-rules