“Regulations will force everyone in the end to transition. If your buildings don’t reach a certain level of [energy performance] you will have no revenue and no liquidity.”

It is a pretty stark statement in one of two recent articles in the Financial Times, both looking at the concept of “stranded” real estate assets.

In the first, as Helen Thomas writes (£) “the bigger question is how changes in work patterns might interact with looming environmental regulations that require commercial property to meet increasingly high standards to remain legally lettable”. Whilst not yet in law, the expectation is that commercial buildings will require an EPC C by 2027, and EPC B by 2030. Is this priced in to current valuations? For the small landlords, individual investors etc is this on the radar?

Yet as George Hammond subsequently writes (£) London property developers are “preparing to pounce…Falling occupation and rising costs have left a large swathe of London’s office market at risk of becoming stuck in the hands of owners lacking the funds to upgrade them”. No doubt the opportunities are out there. Those with cash to invest are well placed and, as Hammond states, the pressure to refurbish, rather than build new, is set to take more prominence. Take the M&S Oxford Street debate for example…