ESG and the future of the High Street
A day doesn’t go by it seems without an article or a forecast about the future of the UK’s high street. Many of these predictions are not always that positive with the coverage tending to refer to the number of closures and declining footfall as consumers choose to buy their goods online rather than visit ‘bricks and mortar’ retail.
The prediction by Savills that the Government’s net zero rules could make over 90% of all retail space unlettable by 2030 is certainly a sobering one, particularly when the estimated cost of bringing all properties up to date could reach £90bn. The article also reveals the growing influence of environment issues on the sector.
On a related theme, the government at the end of March published its consultation on high street rental auctions which proposes letting local councils force landlords to rent out vacant units in high streets.
The open consultation invites viewpoints on a number of practical points and also makes reference to the minimum energy efficiency standards (MEES) which Savills raises concerns about. Within the document, the government acknowledges that many buildings which have been vacant for 12 out of the previous 24 months, could have a low energy efficiency standard. Here the consultation proposes that MEES is not applied.
The consultation closes on 23 June and it’ll be interesting to see the results as it could not only have a significant impact on future the high street, but also on the extent that environmental rules will apply.
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The UK high street could be hit by a £90bn bill for building upgrades due to the government’s new net zero rules.
The new standards will make 91% of all retail space, including the high street and shopping centres, unlettable by 2030 unless urgent and costly action is taken, according to property specialists Savills.
The government will ban commercial properties from being rented out unless they carry a minimum energy performance rating of C by 2027 and a B rating three years later.”