Report warns EPC ‘cliff edge’ could devastate sub-100k sq ft warehouse sectorBIG Things in SMALL Boxes 2024, an industry report by UKWA member Potter Space in partnership with Savills, has revealed that up to 85% of sub-100k sq ft I&L space could be rendered unlettable by 2030, if planned Minimum Energy Efficiency Standard (MEES) regulations come into force.The report, which takes an in depth look at the sub-100k sq ft market, was launched with a webinar discussion hosted by Property Week and entitled ‘ Small to Mid-Box I&L trends, market impact and the pace of future demand.’UKWA CEO Clare Bottle joined Lem Bingley, editor of Property Week, Jason Rocket, MD of Potter Space and Mark Powney, a director in the Savills UK economic team, to discuss the issues raised by the report. Namely:
- Boosting economic growth by unlocking small to mid-box supply
- Energy efficiency rules and the EPC cliff edge facing the industry
- How lack of available stock is strangling the growth of SMEs
The report found that while the outlook for the sector is good, with demand expected to continue rising, supply is lagging behind so that many businesses have been unable to find the warehouse space they need to grow and expand. Lack of available stock has suppressed demand by 38% across the country.
Impending MEES regulations will exacerbate the situation. By 2027, I&L facilities must have an EPC rating of at least C to be let. Currently, 47% of small to mid-box stock doesn’t meet this standard. In 2030, when facilities will require an EPC of B or higher, up to 85% of these spaces could be unlettable.Commenting on the report, Clare Bottle, said: “The small to mid-box market caters to an enormous range of businesses from SMEs through to much larger organisations seeking wide distribution networks and flexible spaces and losing significant portions of existing stock would be very challenging.
We are here to support our members in meeting MEES standards and urge them to take a proactive approach.“We would recommend as a first step that landlords have their EPC reassessed to confirm accuracy following methodology changes in recent years. There are a number of initiatives to consider such as upgrading to LED lighting or adopting rooftop solar that could help you meet those EPC standards without significant retrofitting.”Find out morehttps://www.ukwa.org.uk/wp-content/uploads/2025/01/Potter-Space-Big-Things-in-Small-Boxes-Report-Nov-2024-Front-Cover-Image-.png