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News: February 2010
09/02/2010
Going down
It has been suggested that RICS (Royal Institution of Chartered Surveyors) Red Book changes due in April which will link property values to the sustainability of buildings are likely to create a two-tier property market.
The findings, from a roundtable organised by environmental management and compliance consultancy, Envos, echoed conclusions from a report by Kingston University which stated that unsustainable buildings could see their rental yield reduced by up to 3% and value reduced by up to 16% as a result of RICS changes.
Envos believes the changes are also likely to take less than two years to impact on the market once the principle becomes common currency.
Panellists agreed that initiatives such as the Carbon Reduction Commitment Energy Efficiency scheme (CRC) would start to feed through to property rental values and valuations by quantifying the cost of carbon. This provides one method of helping assess the impact of sustainability on valuation.
The findings come as three of the largest European institutional investors, Dutch pension management firms APG and PGGM and the Universities Superannuation Scheme in the UK, announced that they have set up a global benchmark of the greenest listed property management companies to improve poor reporting levels in the sector, after finding that only one in five (19%) property managers could report verified numbers on the energy consumption of their buildings.
The roundtable was held by Envos ahead of the launch of its new service, the Envos Sustainable Property Assessment (SPA) which provides advice to valuers and investors to determine whether a property will bring a good return.
Envos’ team of specialist environmental and energy consultants survey the building and examine energy usage, energy efficiency, effectiveness of insulation and potential investment needed in the fabric and fixtures of the building. The firm then measures all of these criteria against the requirements of current and forthcoming environmental legislation.
The resulting Envos SPA report can be used either as a negotiating tool by buyers to agree a price or by investors to assess their existing portfolio taking into account the running costs and investment needed in a property to ensure it is compliant with increasingly stringent environmental legislation.
Wade Barker, managing director of Envos stated: “The breadth of environmental legislation now being introduced and the impact this has on properties and property owners is significant and will only get more intense. Buildings account for almost half of the energy used in the UK so they are naturally a target for government legislation. Ensuring a property is compliant and cost and energy efficient is therefore a key element in any investment decision. We hope the Envos SPA will help simplify this process for valuers and their clients.”
The findings, from a roundtable organised by environmental management and compliance consultancy, Envos, echoed conclusions from a report by Kingston University which stated that unsustainable buildings could see their rental yield reduced by up to 3% and value reduced by up to 16% as a result of RICS changes.
Envos believes the changes are also likely to take less than two years to impact on the market once the principle becomes common currency.
Panellists agreed that initiatives such as the Carbon Reduction Commitment Energy Efficiency scheme (CRC) would start to feed through to property rental values and valuations by quantifying the cost of carbon. This provides one method of helping assess the impact of sustainability on valuation.
The findings come as three of the largest European institutional investors, Dutch pension management firms APG and PGGM and the Universities Superannuation Scheme in the UK, announced that they have set up a global benchmark of the greenest listed property management companies to improve poor reporting levels in the sector, after finding that only one in five (19%) property managers could report verified numbers on the energy consumption of their buildings.
The roundtable was held by Envos ahead of the launch of its new service, the Envos Sustainable Property Assessment (SPA) which provides advice to valuers and investors to determine whether a property will bring a good return.
Envos’ team of specialist environmental and energy consultants survey the building and examine energy usage, energy efficiency, effectiveness of insulation and potential investment needed in the fabric and fixtures of the building. The firm then measures all of these criteria against the requirements of current and forthcoming environmental legislation.
The resulting Envos SPA report can be used either as a negotiating tool by buyers to agree a price or by investors to assess their existing portfolio taking into account the running costs and investment needed in a property to ensure it is compliant with increasingly stringent environmental legislation.
Wade Barker, managing director of Envos stated: “The breadth of environmental legislation now being introduced and the impact this has on properties and property owners is significant and will only get more intense. Buildings account for almost half of the energy used in the UK so they are naturally a target for government legislation. Ensuring a property is compliant and cost and energy efficient is therefore a key element in any investment decision. We hope the Envos SPA will help simplify this process for valuers and their clients.”
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