The Minimum Energy Efficiency Standards (MEES)

The Minimum Energy Efficiency Standards (MEES) will become effective on 1 April 2018. As a landlord or tenant, do you know what issues could affect you?

It is clear MEES could have significant impacts for both landlords and tenants on lettings, valuations, rent reviews, and lease renewals. We highlight below a few points to give thought to, but first a quick reminder of what we are dealing with.

What are Minimum Energy Efficiency Standards (MEES)?

The Energy Act 2011 first introduced the MEES regulation. It stipulates that a non-domestic property with an EPC cannot be let if it is rated F or G after 1 April 2018.

Furthermore, in 2023 all properties with an EPC must comply, whether being let or not. There are some exclusions to MEES, such as lettings under 6 months or listed properties.

Lease Renewals and Valuation

A lease renewal under the Landlord and Tenant Act 1954 entitles a tenant to a lease on similar terms to the existing lease. The valuation assumptions differ from rent reviews.

However, if existing case law is applied to MEES compliance, this could have a valuation impact on renewal. The disregard of tenant improvements under Section 34 could result in further valuation complexities if those improvements achieved MEES compliance.

Having a clear idea of where your property stands is vital, as it helps identify negotiation arguments and potential solutions.

Landlord Responsibility

The onus is on the landlord to upgrade the property through cost-effective Relevant Energy Efficiency Improvements (REEI). These must be implemented prior to letting.

Purpose and Impact

Introducing mandatory regulations to improve a property’s energy efficiency is, at face value, a good way forward. It helps future-proof the UK’s building stock and supports carbon emission reduction targets.

We are in favour of these initiatives. The medium to long term view should result in energy cost savings and a reduction in greenhouse gases. However, as with all new regulations, there are potential ramifications once you consider the logistics.

These regulations could affect rental values at rent review or lease renewal, and therefore capital values and possibly future yields.

Lease Issues to Bear in Mind

A rent review at or beyond 1 April 2018 will make certain assumptions on the ‘hypothetical letting’. One assumption is whether tenant’s improvements should be disregarded.

It is quite possible that the property only achieves an energy efficiency rating of E or below because of tenant’s improvements, for example building services and new LED lights.

Therefore, if improvements are disregarded, that fact potentially renders the hypothetical property unlettable in its existing state. Also, can the property be assumed to be ‘fit and available for immediate occupation’ if the required EPC level is not in place?

There are existing precedents that could be extended to apply to MEES compliance. The cost of such improvements could be taken into account at review, and case law and time will determine what becomes accepted.

There is an argument that rent reviews before the compliance date, for terms extending beyond, will also reference the requirement as a factor.

A Few Points to Think About

1. The current EPC rating is key to any future works required and potential lease negotiations. Have you considered the EPC ratings for your properties, and are the EPCs robust enough to be scrutinised and verified? Ensuring you have accurate EPCs with all the background data is essential as a first step for any negotiations.
2. Were tenant’s improvements responsible for lowering the EPC to E or better, and do both parties have all the necessary documents and consents in place?
3. Is your property E rated? It could slip over the threshold into an F due to future Building Regulations introducing enhanced energy performance requirements. An EPC calculation is dynamic and refers to current Building Regulation requirements. Future changes could see your property move to an F. Plan to future-proof these buildings.
4. Are you clear what constitutes an REEI? Can it be implemented as part of a planned maintenance programme?
5. Have you considered the potential impacts for a rent review or lease renewal? Are there break clauses coming up where these regulations may be used for negotiation?
6. Are there any REEI exclusions that apply? For example, are there reasons why consent to works would not be available, or could any REEIs actually devalue a property?
7. As a tenant, is it possible you will become a landlord in the future due to subletting? You will need to consider these regulations in that context.

Planning Ahead

Two years or 24 months may seem a long way away, but the clock is ticking to fully consider each property, either owned or occupied, that may be in scope, and then plan for the improvements and outcomes.

John Nguyen joins Kinney Green to further develop the firm’s strong management services offer.

John Nguyen joins Kinney Green from Cushman & Wakefield, where he has spent the last two years within the Global Occupier Services team. In this role, he managed a number of property portfolios for high-profile clients including Royal Mail, Pizza Hut, KFC, and City Link.

Prior to this, John Nguyen worked at Colliers International in Melbourne, Australia for two years as an Assistant Valuer. During this time, he valued a range of properties across the industrial, commercial, and retail sectors, with a particular focus on office buildings.

The John Nguyen Kinney Green appointment brings strong international experience across both property management and valuation. This enhances the firm’s ability to deliver high-quality management services across a range of property sectors.

His background in managing large-scale occupier portfolios, combined with valuation expertise, will support the continued development of the management services platform at Kinney Green.

We are delighted to welcome John Nguyen to the team. His experience will strengthen client service delivery and support the ongoing growth of the business.

This appointment reflects Kinney Green’s continued focus on attracting experienced professionals to support its long-term strategy.

At Kinney Green, John will contribute to the expansion of the management services offering and help deliver value to clients across a range of assets.

The addition of John Nguyen further strengthens the wider team and reinforces the firm’s commitment to high-quality service delivery in the property sector.

Kinney Green has secured a mandate at 10 Old Bailey Kinney Green. The firm will provide asset management and consultancy services alongside Anglo Fortune Capital Group.

In this role, Kinney Green will proactively identify strategies. It will also deliver actions to maintain and enhance the asset.

Therefore, the focus will remain on protecting long-term value. In addition, the team will aim to improve overall building performance through active management.

The Property

10 Old Bailey is a 72,000 sq ft high-quality office building in EC4M. It sits on the eastern side of Old Bailey in the City of London.

Importantly, the building occupies a prominent position. It is surrounded by key landmarks. To the north sits the Central Criminal Court (the Old Bailey itself). To the east lies Amen Court, the official residence of the clergy of St Paul’s Cathedral. To the south is 5 Old Bailey, a 1970s office building.

As a result, the property benefits from a highly established and recognisable location.

Mandate Overview

The 10 Old Bailey Kinney Green appointment reflects continued growth in the City of London office market. Moreover, it strengthens the firm’s position in high-quality commercial asset management.

Kinney Green will work closely with Anglo Fortune Capital Group. Together, they will identify opportunities to enhance performance and ensure the building remains competitive.

In addition, the mandate will include ongoing strategic asset management input. This will support long-term value creation and occupier satisfaction.

Outlook

Therefore, this instruction further expands Kinney Green’s portfolio of central London assets. It also demonstrates the firm’s commitment to proactive and value-driven consultancy.

Finally, Kinney Green is delighted to work alongside Anglo Fortune Capital Group on this landmark EC4M property.

Mr Moore has been named this week’s L&T competition winner after taking first place in the internal challenge.

The L&T competition winner demonstrated strong analytical thinking and a clear understanding of lease and tenant matters. He worked through each scenario with accuracy and confidence.

Throughout the exercise, he showed a strong grasp of key principles and applied them consistently. This approach helped him stand out from the rest of the participants.

The L&T competition winner also impressed with his structured approach to problem-solving. His attention to detail ensured strong and consistent answers across all scenarios.

There was also a light-hearted reference to his “sparkling intellect,” which added humour to the internal competition and kept the tone informal.

Internal initiatives like this are a valuable way to bring teams together and encourage engagement across the business. They also help reinforce technical knowledge in a more relaxed and interactive way.

These types of incentives are particularly effective because they:

• Encourage friendly competition across teams
• Help strengthen technical understanding in a practical setting
• Promote knowledge sharing in an informal environment
• Improve collaboration between colleagues
• Add variety to day-to-day work activities

Overall, initiatives like this support both learning and team culture. They create a positive environment where colleagues can develop skills while enjoying the process.

Congratulations once again to Mr Moore, this week’s L&T competition winner.

Rating Revaluation 2017: Fast Approaching!

We are eagerly awaiting the delayed revaluation process. On 1st February, the Valuation Office Agency (VOA) confirmed a key date. They will publish the draft Rating List for the 2017 Rating Revaluation in September 2016. This announcement gives businesses a vital window to prepare for new overhead costs.

You must register your interest now to receive your new assessment early. You can find official guidance on the government website. We highly recommend early registration. This helps you avoid the last-minute rush when the draft list goes live.

How the Revaluation Affects You

This change affects all owners and occupiers. Therefore, we urge you to review your current 2010 Business Rates assessment immediately. Many people wrongly believe that old assessments no longer matter. However, your current Rateable Value serves as a critical baseline. It will directly impact your rate liability for the five-year period between 2017 and 2022.

The upcoming shift reflects property market changes since the last valuation. For many, this means a significant change in the “multiplier.” We use this figure to calculate your annual bills. If you understand your position in the draft list early, you can forecast your finances better. It also allows you to spot errors in the VOA data.

Professional Registration and Support

The VOA requirements and the “Check, Challenge, Appeal” process are complex. Busy business owners often struggle to find the time. You may ask: “Can we register on your behalf?” The answer is yes. We provide a full service to manage the registration for you. Our team ensures you receive your data the moment the VOA releases it.

Act now to identify unfair assessments. You should do this before the new rates take full effect. If you have not booked a professional rate ‘check-up’ yet, contact our team today. We are ready to help you manage your liability.

Kinney Green is delighted to announce a recent success in the West End. Our team successfully let the last remaining floor at 21 Conduit Street, W1. Apperly Estates has owned this property since 1923. Recently, they undertook a comprehensive refurbishment of the building. It sits on one of the most prestigious streets in the area. The project provides approximately 4,000 sq ft of Grade A boutique offices in Mayfair behind a retained period façade.

Record-Breaking Lettings

Our West End Office Agency team received instructions to let the first to fourth floors. These spaces range from 800 to 1,000 sq ft. We secured tenants for all four floors within six months of the works finishing. A variety of occupiers now call the building home. These deals reached some of the highest rents ever seen on Conduit Street.

David Apperly, Chairman of Apperly Estates Ltd, shared his thoughts on the project. He noted that Kinney Green secured very quick lettings for these high-quality floors. We achieved good lease terms and rents well ahead of their initial projections. In fact, the final floor sparked a bidding war. A French property company and an Icelandic Fund Manager competed for the space. This demand proves the continued appeal of premium offices in Mayfair.

Why Choose This Location?

Mayfair remains a top choice for global businesses. The blend of historic architecture and modern Grade A interiors creates a unique working environment. At 21 Conduit Street, the “boutique” feel appealed to high-end occupiers who value privacy and prestige. The success of this instruction highlights our team’s ability to match the right tenants with luxury spaces.

If you are looking for premium offices in Mayfair or need advice on your commercial portfolio, we can help. Our agents understand the local market dynamics. We strive to deliver results that exceed expectations for both landlords and tenants.

For further information, please speak with Kevin Kemplen or Henry Brewster. You can reach our team at 020 3691 6060.

Finding the right offices in Hammersmith is a priority for many businesses as we head into 2016. Our West End office is pleased to report a spate of transactions completed immediately after the summer period. These deals set a positive tone for the rest of 2015. Despite usual seasonal lulls, the market remains incredibly active.

Securing Premium Offices in Hammersmith

Advised by Kinney Green, Biotechnology Company Silence Therapeutics recently moved into their new premises. We originally received our appointment at the end of 2013 to advise the client on relocation. Our team conducted a detailed review of all available options. After this review, we decided the best course of action was to postpone the move. The client renewed their existing tenancy on a short-term basis instead.

This strategic delay allowed the client to wait for the perfect opportunity. Even though the local market remained tight with limited supply, we found a solution. The market was particularly difficult for units under 10,000 sq ft. However, we successfully agreed terms for the seventh floor at 72 Hammersmith Road, W14.

Achieving Favourable Lease Terms

The new space provides approximately 4,500 sq ft of high-quality accommodation. The agreed rent reflects £43.50 per sq ft. We also secured an extended rent-free period for our client. This allowed Silence Therapeutics to undertake an extensive fit-out. Now, the floor ideally suits their specific technical requirements.

Tim Freeborn, Finance Director at Silence Therapeutics, praised the result. He noted that Kinney Green helped find a new office despite a restricted brief. Our team showed a good selection of properties and stayed flexible as requirements changed.

Expert Advice for Offices in Hammersmith

Hammersmith continues to attract top-tier tenants in the science and tech sectors. Low vacancy rates drive competition, but expert advice can still secure premium space. If you are searching for offices in Hammersmith or need to review your current lease, our team offers the local expertise you need.