The net zero countdown: What property investors need to do before 2030

The countdown to net zero is still on and for property investors with premises and portfolios across the UK, the implications are moving from the theoretical, to the practical and commercial.

Over the last five years, ESG expectations from occupiers have been rising steadily, fuelled by both a desire to ‘do better’ as well as by proposed changes within the MEES Regulations.

Amid this landscape, and on the back of recent calls from the British Property Federation (BPF) for clarity on MEES for non-domestic properties, landlords and investors are facing an ever narrowing window of opportunity to future-proof their assets.

From 2030, commercial properties will be expected to meet a minimum EPC rating of B, and much of the UK’s existing stock simply isn’t there yet.

Whilst the number of non-domestic properties with EPC ratings of B and above has accelerated, particularly since 2020, our analysis of the latest Government data on EPC registrations reveals that at the end of 2025, 58% of properties remained uncompliant with the forthcoming MEES requirements (2025 YTD (Q1-Q3).

As pressure mounts, landlords and investors with assets that fail to adapt to improve energy efficiency, risk their commercial property assets becoming stranded, difficult to let, harder to finance, and ultimately devalued.

Emma Cooper, Lead Surveyor in the Property Asset Management (PAM) team at Vail Williams, explores what investors should be doing now, to protect value, retain tenants, and build a credible route to net zero through proactive asset management.

Landlords must act to improve the energy efficiency and EPC ratings of their assets within the next five years, if they are to avoid falling short of the proposed minimum standards under MEES.

The challenge of meeting the net zero countdown, however, is scale. In England and Wales, over half (58%) of commercial property remains below B an EPC rating, particularly within older office, industrial and warehouse stock.

So, what should landlords and investors do about it?

Vail Williams’ property asset management team works hand-in-glove with its building consultancy colleagues to project manage such works, as well as supporting with pre-planned maintenance schedules to ensure proactive building maintenance plans.

“Even where occupier demand exists, tenants are increasingly unwilling or unable to occupy inefficient buildings with high running costs. Over time, the market will simply discount non-compliant assets. In that context, net zero is not about ticking boxes. It is about safeguarding income and the long-term value of your asset,” commented Emma.

Who is responsible for shouldering the net zero burden?

Improving the energy efficiency of the buildings within your portfolio isn’t a cost-neutral exercise, but it can pay dividends in the future.

Typically, as the landlord, you control the building fabric and core systems, while your tenants control how much energy they actually use, and the associated cost of this.

Emma added: “At a time of rising occupational costs, from business rates to rents, occupiers are, for the most-part, focused on affordability and operational cost, rather than occupying a “best-in-class” sustainable building.

“But that is not to say that occupiers aren’t interested in supporting you in delivery of a more sustainable building. Indeed, it might even help you to retain them at lease break / end. The difficult question is to what extent that cost burden can be shared.”

Who pays for improvements made? Can you, as the landlord, enforce works through the lease? Why should tenants shoulder the cost of some upgrades that improve the landlord’s asset?

“Yet the alternative, doing nothing, ultimately harms both parties. If a building becomes unlettable, everyone loses. This is where an asset manager can help, through the relationships they have with both landlord and tenant, and the ability to collaborate and come to a working agreement on issues such as net zero improvements,” explains Emma.

Rather than forcing change, most successful landlord/investor net zero strategies focus on alignment of interests.

Green leases are becoming an increasingly important tool, allowing landlords and tenants to commit jointly to sustainability objectives. These can include:

• Mandating energy-efficient fit-outs
• Introducing green lease clauses
• Incorporating green break clauses
• Regearing leases to embed sustainability obligations

“Where your tenants are resistant, offering incentives can be effective. Rent-free periods, adjusted rent reviews or other commercial concessions can help offset the cost of works, creating a more balanced outcome for both sides, whilst delivering on the energy efficiency need. The goal is collaboration, not confrontation,” adds Emma.

Crucially, this is not just about compliance. Sustainable buildings are increasingly proven to outperform:

• Rental premiums of 7-15%
• Capital values 20-30% higher than less efficient stock
• Lower void periods
• Stronger tenant retention

Emma explains: “Sustainable buildings will attract higher-quality occupiers with their own ESG commitments, reducing income volatility over the long term. For investors, net zero improvements should be viewed as a value strategy, not a cost burden.”

“Understanding the history of a building, the nature of its tenants, and the detail of its leases allows solutions that work commercially for your tenants, while keeping your long-term investment goals at the forefront. Where tenants remain resistant, lease regears can provide a route to introducing sustainability provisions in a structured, strategic way.”

“Of course, every asset presents its own constraints. Your approach to a Victorian listed office would require a very different approach than that of a 1970s industrial estate or retail park.

“Structural limitations, listed building protections and planning considerations all shape what is achievable. That is why generic net zero checklists rarely work. Each asset needs a bespoke, informed strategy, and someone who knows it inside out,” explains Emma.

The net zero countdown has started

While the government may revisit MEES and EPC requirements which remain under consultation, landlords and investors should act on the basis that momentum towards net zero will continue.

Market expectations, tenant demand and investor scrutiny are all moving in one direction and doing nothing or moving too slowly will become the most expensive option.

Net zero is no longer a distant ambition. For property investors, it is a defining factor in asset performance over the next decade.

At Vail Williams, our property asset management team is on hand to support landlords and investors with a clear, costed and realistic roadmap to net zero for their assets, tailored to your portfolio, your tenants and your investment objectives. Not only this, our building consultants can project manage any works required, working closely with our planning team, where required. For support with your net zero property asset requirements, get in touch.