Reduce Occupier Energy Costs For Better Rental Growth

The Bank of England has maintained interest rates at 5.25% since August 2023, during this period inflation has fallen from 6.7% to 4.0% as higher mortgage rates, costs of borrowing and inflated prices have reduced spending capacity. An unexpected rise in inflation from 3.9% to the current 4.0% shows that whilst interest rates remain high, tackling inflation is not a given and external factors; such as geopolitical tensions could continue to have a negative impact on some commodities and energy prices.

In this current climate where, geopolitical tensions can have such a significant impact on energy prices, especially as was seen when Russia invaded Ukraine, it’s more important than ever to look at the sustainability of properties if only to enable occupiers to achieve stable energy prices.

At IDRE we are engaging with a number of clients as part of our asset management strategy to help them retrofit solar energy into their current assets, this involves addressing various issues such as, structural capacity, lighting, insulation, heating, occupier usage and energy contracts in order to provide secure sustainable energy at an appropriate cost to the occupier.

Whilst some occupiers may not see sustainability as a high priority, the ability to provide them with secure energy limits their influence to price burdens from external factors and allows for long term growth and better occupancy.