Julia Hart, Director at SiteLine Properties
SiteLine regularly brokers large commercial property deals for financial institutions, family funds and developers, who are meticulous about conducting financial checks and property surveys, as well as assessing tenant demand.
However, it is apparent that some investors are avoiding the equally important issue of energy efficiency.
We recently had a £160 million office block on our books, which a Malaysian investment fund took an interest in, but as soon as they realised the energy performance certificate (EPC) rating was low and would, therefore, mean spending out a substantial amount on energy efficiency measures, they lost interest.
It was extremely frustrating. Instead of focusing on the retrofit expense, this investor could have seen a low EPC as a good opportunity to improve the building’s rating. This would not only have benefitted their future tenants, but also made a difference to the property’s value when they came to sell it. Unfortunately, this isn’t an isolated incident, as there seems to be some ignorance and negativity around EPCs and a fair amount of resistance to spending money on ‘green’ improvements such as insulation or solar panels.
Luckily, as an established deal provider covering both the UK and Europe, we have a number of developers actively looking for exactly those buildings where they can add value. One client in particular is seeking out buildings with low EPCs in order to make improvements.
It makes good business sense as, quite rightly, tenants increasingly want properties with good EPC ratings. They are also becoming part of the mortgage application process.
Of course, EPCs only form part of our investigative work to ensure potential deals are robust. Our process includes valuations, financials, area surveys and market opportunity analysis, backed by multiple investment options including best exit strategies, margins and high-yield rentals. We undertake detailed due diligence, financial analysis and an evaluation process, as well as suggesting potential exits for every project, which can range from shops to warehouses and large office blocks.
We save investors the time and energy by bringing them quality assessed opportunities – mainly those with few people in the chain – and always remaining careful not to advise on any deal, as investors need to make their own decisions. Due diligence is at the heart of our service. We are unlike many brokers, running the numbers and making sure a deal is viable.
Our team run through hundreds of opportunities each week looking for an uplift, deciding whether a property is worth buying at that particular price. Sifting through them is a painstaking job as we find that 99.9% have been over-estimated or are simply not viable.
Our Berkshire-based family business uncovers opportunities for investors, developers and financial institutions alike. We look for genuine opportunities to buy property, including turnkey solutions and full development on existing or prospective new projects. We also sell on behalf of companies and developers across the UK and in Europe, searching for retail space for high street brands such as Costa and those looking for trade counters solutions in light industrial units around the UK.
In the property business for over eight years, Siteline recently moved into the high net worth sector and now handle substantial deal opportunities, including hotels and golf courses, and are currently working on a Central London development worth £2.5 billion!
We understand the risks involved in purchasing any size of commercial property, such as the legal requirements, quality control, budgets, timelines and the crucial importance of ROI, and can deal with them effectively.
Currently, there is an increase of potential acquisitions, and we have seen the return of buyers that have been quiet since the pandemic. Despite many landlords having difficulties with tenants keeping up with their rents, the sector is solvent and thriving. One of the consequences of the last few years is that after many brands ceased trading, landlords no longer insist on big names taking on leases, but are now more interested in independent, entrepreneurial retailers, which has brought about more diversity and energy to the sector.
We are feeling a positive shift that many landlords have adjusted their outlook and we hope that the same can now be true for EPCs. As the issue of energy efficiency moves further up the national agenda, and with new rules set to force commercial landlords to raise EPCs to at least a band C by 2027, we’ll continue to highlight the issue and convince those doubtful funders and commercial landlords that there are even bigger opportunities to be had.
Thanks to Julia Hart, Director at SiteLine Properties for this blog.
Phone: 07949 154 855