Estate agency Savills Ireland projects that landlords will bear a cost of no less than €7 billion to make their properties compliant with stringent EU environmental regulations. The European Green Deal, aimed at eradicating greenhouse gas emissions by 2050, requires offices to attain a minimum B energy efficiency rating. Only 2% of Irish offices currently have an A rating, whereas a significant 60% are ranked D or lower, highlighting a common problem of energy inefficiency.
Orla Coyle, head of environmental and social governance at Savills, notes the potential impact on business expenditure and the desirability of buildings for prospective tenants due to these forthcoming rules. Nonetheless, she holds that the cost of upgrading will indeed vary as “each project is unique”, and be ultimately influenced by the building’s existing condition.
While citing the challenges, Ms Coyle argues in favour of investing in energy efficiency upgrades, asserting it will deliver long-term cost benefits, adherence to future regulations, and bolster the buildings’ overall appeal.
The newly adopted EU’s Energy Performance of Buildings Directive necessitates certain performance standards for commercial buildings and sets renovation goals for member states. Savills observes that the Energy Efficiency Directive has established norms, especially for the public sector, one of the predominant tenants of Irish offices, leading the way.
Moreover, the Corporate Sustainability Reporting Directive obliges businesses to disclose their compliance with environmental and social governance norms. Andrew Cunningham, Savills’ office director, forecasts that offices adhering to the new regulations, especially those with an A-rating, will be in high demand.
In his opinion, businesses that are quick to rent these superior office spaces will gain an advantage, anticipating a shortage of such spaces as the year 2030 advances. In Ireland, only 10% of offices meet the B rating standard while 30% achieve a C standard. Meanwhile, over one-third fall into the E, F, or G rating categories.