Office owners face bills of at least €7 billion to bring their properties into line with tough EU environmental standards, according to estate agent Savills Ireland.
The firm maintains that the European Green Deal, meant to effectively eliminate greenhouse gas emissions by 2050, requires that offices reach at least a B energy rating. Savills calculates that upgrading buildings to the standards that the EU intends imposing under the deal will cost landlords “at least €7 billion”.
Just 2 per cent of offices in the Republic hold an A rating, while six out of 10 are rated D or lower, “underscoring a widespread issue with energy inefficiency in Irish office buildings”, says the firm.
Orla Coyle, Savills’ head of environmental and social governance, warns that the proposed rules will affect businesses’ costs and buildings’ attractiveness to potential tenants.
Romantasy, QuitTok and other words from a dystopia-coded year
Have Ireland’s data centre builders shot themselves in the foot through their own greed?
The old order of globalisation may be collapsing – and bringing Germany with it
Wonderwallets: the cost of everything in 2024, from Oasis tickets to Leinster House bike shelter
“However, upgrading buildings to meet new energy standards is not a one-size-fits-all process. Each project is unique, and costs will vary depending on the building’s condition,” she says.
What's behind the recent surge in housing construction here?
Ms Coyle adds that despite these problems, spending on upgrading buildings’ energy efficiency will save cash in the long term, ensure that they comply with future rules, and boost their marketability.
The EU’s Energy Performance of Buildings Directive, adopted last month, mandates minimum performance standards for commercial properties and sets renovation targets that member states must hit.
[ Less than 1% of office buildings occupied by State are A-rated for energyOpens in new window ]
Savills notes that the Energy Efficiency Directive sets targets for the public sector, one of the biggest tenants of Irish offices, to lead by example.
Also, the Corporate Sustainability Reporting Directive demands that businesses report on how they are meeting environmental and social governance standards.
Andrew Cunningham, the firm’s director of offices, predicts that tenants keen to comply with new standards, along with broader environmental considerations, will quickly occupy A-rated buildings.
“Those who act swiftly to secure this high-quality office space will gain a competitive edge, as the availability of such spaces is predicted to fall significantly as 2030 approaches,” he argues.
A breakdown of Irish offices’ energy ratings show that 10 per cent are B rated and 30 per cent reach C standard, while more than one in three are E, F or G rated.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
