The size of the challenge is clear. An estimated 80% of the commercial buildings that will be here in 2050 already exist today, and most of these are currently sub-standard in terms of energy efficiency performance. As highlighted in our article ‘Prioritising sustainability in the real estate sector’, the challenge is not only working out what needs to be done, but also who is going to do what and who will pay.
There are a number of complex relationships which influence the debate. The majority of commercial space in the UK is leased so we have the landlord-tenant relationship to consider. Landlords want to maximise the recovery of their property holding costs from tenants and to protect their capital investment.
In turn, tenants want to limit their occupation costs from capping service charge to limiting reinstatement/repair liability. In addition, there is often a third party with a vested interest in the property because the majority of leased space will also have a funder with security over the property.
Read this piece in full on the Ashurst website: https://www.ashurst.com/en/news-and-insights/insights/leased-buildings–who-pays-the-price-for-net-zero