Ian Tew, Partner at Knight Frank in Newcastle, shares his expertise on decarbonising commercial properties.
Commercial property owners and investors are increasingly aware that decarbonising buildings is no longer just about environmental responsibility – it’s a financial and strategic necessity.
Regulations are tightening, tenants are demanding more sustainable spaces, and investors are factoring environmental performance directly into valuations. Yet amid rising costs and economic uncertainty, many owners remain cautious about when – and how – to act.
We are working on decarbonisation strategies for several buildings in Newcastle city centre that were built in the late 90’s/ early 2000’s development cycles. These projects are proof that upgrading doesn’t have to be as daunting and damaging to the balance sheet as you think. There are positives, for example, quicker payback from upgrading M&E equipment than many expect, cheaper energy bills and new tech means everything in a property becomes more controllable – creating more savings.
Smarter steps, not just bigger budgets
Analysis of more than 3,000 commercial properties (offices, retail & logistics buildings) that improved their EPC rating to at least a B – reveals an encouraging pattern. A significant 65% achieved it by installing LED lighting with smart controls, one of the simplest and least disruptive interventions. Only 36% replaced gas-fired boilers with air-source heat pumps, a far more capital-intensive measure.
Meanwhile, 28% of properties added solar control solutions such as reflective window coatings or shading devices – practical, low-impact upgrades. On average, each upgraded property implemented four measures, combining quick wins with longer-term efficiency investments.
Effective decarbonisation is about choosing the right combination of improvements for each building’s condition, layout, and occupancy pattern – and sequencing them strategically over time.
De-gassing buildings, by replacing gas boilers with air source heat pumps or electric heating, is a big lever in regard to improving EPC certification and this tactic is one of the most expensive. However, by tying the work in with a Planned Preventative Maintenance strategy when managing life cycle replacement you can achieve advantages regarding payback periods and crucially, energy savings.
Our team is carrying out a lot of modelling exercises for landlords, alongside other consultants, to create plans that achieve the highest levels of certification in the most cost-effective way.
Sequencing for success
Successful decarbonisation strategies take a phased approach, targeting low-cost, low-disruption actions first while planning for deeper upgrades when leases expire or refurbishments are due.
For example, lighting, controls, and solar shading can often be installed with tenants in situ, avoiding income disruption. Later phases might include replacing heating systems or adding renewable energy capacity. This staggered retrofit strategy spreads costs, keeps buildings operational, and allows energy savings from early measures to help fund later ones.
Each asset needs careful assessment of its design, existing infrastructure, and occupier behaviour to determine the right path. Working with specialists early on helps optimise timing and scope, ensuring interventions deliver measurable performance gains and avoid wasted money.
Data-driven decisions
Modern retrofit planning increasingly depends on real-time data. Smart meters, digital twins, and energy management systems give owners precise insight into how buildings actually perform, highlighting inefficiencies invisible to the naked eye.
Operational data can identify quick wins – such as unnecessary HVAC use during non-occupied hours – that deliver savings without any capex.
Over time, data also supports evidencebased investment planning, helping owners model payback periods, benchmark portfolio performance, and communicate progress to investors and regulators.
The payoff: future-proofed performance
Ultimately, decarbonising doesn’t have to mean draining budgets or emptying buildings. By sequencing interventions, leveraging data, and aligning with recognised ESG metrics, property owners can make tangible progress today – protecting both their income and their asset’s relevance tomorrow.
Ian can be contacted on 0191 594 5037 or ian.tew@knightfrank.com