One of the City’s best-known real estate equity analysts has singled out Derwent London and Great Portland Estates as the kind of office ‘upcyclers’ best-placed to turn around the fortunes of buildings with less-than-impressive environmental credentials.
In a note this week, Jefferies’ Mike Prew said the investment bank will start incorporating property portfolio EPC data into its research reports on REITs. By 2030 rented commercial property must have a rating of A or B, while for residential property the required band will be A, B or C from 2025 for new leases and 2028 for existing ones.
With the electricity grid being cleaned up, some ratings may be due a lift naturally, Prew predicted. “With decreasing carbon emissions from UK grid electricity, building EPC ratings should improve at no cost to the landlord, with the lowest F-G bands benefiting most,” he wrote.
