COMMERCIAL property investors and occupiers in Worcestershire should start planning energy efficiency upgrades or they may not be able to lease the buildings, an industry specialist has warned.

Derek Lawrence, regional director in DTZ’s building services team, said that new regulations to non-domestic property were coming in under the Energy Act of 2011 and landlords and tenants have until 2018 to comply. Failure to act could result in being unable to lease the asset and fines of up to £150,000.

Mr Lawrence added: "The effects are being felt already with occupiers stipulating minimum performance ratings for new buildings and this will only increase. In essence you are looking at an emerging two-tier market with poorer performing stock being marginalised even before the regulations come into force unless investors and occupiers take steps to prepare for implementation.”

The Energy Act provides a framework to facilitate the upgrade of the UK’s worst performing buildings. DTZ anticipates the clarification will have a number of knock-on effects. On the occupier side, energy performance of buildings is likely to become an issue at rent reviews while lease renewals and dilapidations will also be affected.

Similarly, investors will add Energy Act compliance to their risk analysis of new purchases and valuations will also be reviewed closely in light of the impending regulatory deadline.

Mr Lawrence said: "For commercial property owners and occupiers, improving the operational performance and efficiency of their buildings has long been a primary objective. Improving energy performance is now an essential part of that agenda.”