Newspaper article The Journal (Newcastle, England)

2014 - the Age of Sustainability

Newspaper article The Journal (Newcastle, England)

2014 - the Age of Sustainability

Article excerpt

Byline: KEVAN CARRICK

THE term "silent revolution" may be fairly applied to the changes we have seen regarding the valuation of property in relation to sustainable standards.

The last Royal Institution of Chartered Surveyors' (RICS) Guidance Note, which sets the industry standard for valuation in relation to sustainability and commercial property valuation, was written in 2009 but matters have advance so quickly it has already been re-written.

Sustainability, in relation to the valuation of commercial property, encompasses a wide range of physical, social, environmental and economic factors. The valuer needs to be aware of all and it can be challenging.

The environmental risks alone are listed as; flooding, energy effi-ciency, climate, design, configuration, accessibility, legislation, management and fiscal considerations.

But what does this mean in practice, particularly in the North East of England? When acquiring a property, an occupier or investor compares that property against the prices of the other properties available and their attributes.

There are many questions to ask, such as which is the most 'competitive' building for the occupier and which will result in the lowest operating costs.

The quality of building is thus very important.

Currently, this is often ignored but it is clear that a building with high energy costs should be considered less competitive than a building that is energy efficient.

There are two important factors at work.

First, government legislation that will prevent the sale or letting of buildings with an energy rating of less than "E" and, secondly, the price of energy, which is escalating and will continue to do so in the foreseeable future.

So the basis of value is changing. It is no longer the simplistic criteria of location, location, location but a much more sophisticated approach to ensure that the sensitivities demanded by the market place are recognised and applied properly. …

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