Commercial property accreditations

Commercial property accreditations

Will commercial property accreditations make your property more attractive to buyers and tenants?

As awareness of green issues and sustainability grows, we are seeing more interest in the range of formal accreditations which building owners and landlords can apply for.  There are plenty of them and it can be difficult to know where to start.  If you are wondering whether to seek accreditation, your solicitor should be able to advise you about how that might fit into your future sales or lettings strategy.

‘As our understanding of the environmental impact of commercial property grows, we have increasingly sophisticated tools to measure and compare how individual buildings perform,’ explains Kimat Singh, head of the commercial team with Kerseys Solicitors. ‘The challenge is to work out which accreditation will have a real impact on your ability to sell or let your buildings.’

It helps to start by dividing the various schemes into categories.

Environmental performance of buildings

There are a number of accreditation schemes that focus on your building’s environmental performance:

• BREEAM (the Building Research Establishment’s Environmental Assessment Method) is a broad measure of the sustainability of new builds and also of how buildings operate in day-to-day use. It looks at 12 categories, including use of energy, water and other resources, pollution, waste, use of materials and impact on transport.  BREEAM ratings go through five categories from ‘pass’ to ‘outstanding’, with an extra ‘acceptable’ category that applies only to the scheme for assessing buildings in use.  BREEAM certifications are widely recognised.
• NABERS (the National Australian Built Environment Rating System) is, as the name suggests, an assessment system that started life in Australia but is now used and recognised in the UK. What makes NABERS different from other certifications is that it measures the actual performance of a building, not just its potential.  Assessors enter data for use of energy and water, the level of waste produced and the quality of the environment inside the building.  Ratings range from one to six stars.  One star is ‘making a start’; four stars is ‘good’ and six stars is ‘market leading’.

Sustainability of your property investment business

Some accreditation schemes take a rather different approach, looking not just at individual buildings but at your whole property investment and management business:

• GRESB (Global Real Estate Sustainability Benchmark) is the best known scheme that focuses specifically on real estate. Its assessment of property investments covers two areas: the way you manage them; and how they perform against indicators like energy and water usage, emission of greenhouse gases and waste.  For development projects; GRESB looks at management, as well as assessing the way your business engages with sustainability issues when designing, building or renovating properties.
• Carbon Neutral – the Carbon Neutral standard supports businesses in assessing the total emission of greenhouse gases, not just from their direct activities but also from the products and services they buy; setting targets to reduce them and, eventually, taking action to offset any unavoidable emissions. It is designed to apply to any type of business but, given the role of the built environment in the UK’s carbon emissions, it has particular relevance for commercial property businesses.

Other measures for your building

There is another set of accreditations which focus on aspects of your building that will be directly and immediately useful to occupiers:

• WiredScore is an assessment of the digital infrastructure of your building. Put simply, it scores how easy it will be for occupiers to use technology, by looking at how internet services get into a building and how well Wi-Fi signal works throughout it.  If you get a WiredScore assessment at the design stage of a development project, you may be able to spot possible problems and make changes before you actually get started on site.  WiredScore is well known in the UK and a good score can make your building more attractive to potential tenants.
• The WELL Building Standard measures how a building could affect the health and wellbeing of occupiers by looking at seven factors, including physical things like the quality of air, water and light but ranging also to the level of noise distraction, the provision of relaxation spaces and how easy it is for occupiers to be physically active and get nutritious food while at work.

Why get an accreditation?

If you want your business and your commercial property to be more sustainable, accreditations can give you a useful benchmark against which to measure your progress.  They may help you move from ‘doing your best’ to credible, science-based targets.  If you are keen to include green clauses in your leases, some of the accreditations will help with your obligations to gather data and measure performance.

There are also sound commercial reasons for demonstrating sustainability in your commercial property, as this is increasingly likely to be part of the decision-making process for potential buyers or tenants.  Buyers who need a loan to finance the purchase may find that their lenders insist on seeing sustainability data and this will be much easier if you have a recognised accreditation.  On top of this, there is evidence that some tenants and purchasers will pay more for a building which scores highly on environmental and sustainability criteria.

You may also want to build your own reputation for having sustainable values at the heart of your business, which may be attractive to investors and employees.  Accreditations require rigorous assessment, so are a good defence against possible claims of green-washing.

What are the challenges with Commercial property accreditations?

The most obvious challenge is the time and money you will have to devote to getting an accreditation.  Once you have it, you will need to maintain it, so it is more than just a one-off investment.  When deciding whether or not to go for an accreditation, you may need to think hard about the nature and location of your property, to work out whether the outlay will make enough impact on likely buyers or tenants to be worthwhile.

How we can help

Assessment of environmental impact and sustainability changes all the time, so it can be difficult for developers and investors to keep track.  Our commercial property team can help you understand the best-known accreditation schemes and work out if any of them would be right for you.

For further information, please contact our commercial team at Kerseys Solicitors in Ipswich at [email protected] or telephone 01473 213311 or Kerseys Solicitors in Felixstowe at [email protected] on 01394 834557 or Kerseys Solicitors in Woodbridge at [email protected] on 01394 813732 or Kerseys Solicitors in Colchester at [email protected] on 01206 584584.