Energy performance certificates may increase rents and apartment prices

Prague - An increase in office space rents or apartment prices may be a consequence of a new regulation that will take effect from January next year. This follows from findings by ČTK among real estate market experts. According to this regulation, newly built or renovated properties exceeding 1000 square meters in the Czech Republic will be required to have an energy performance certificate for buildings.
The energy performance certificate comprises a protocol demonstrating the energy consumption of the building and a graphical representation of the energy efficiency of the house. In buildings with a floor area exceeding 1000 square meters that are intended for public services, such as schools, public administration buildings, or retail, the graphical part of the certificate must be displayed in a visible location. Certificates are being implemented across the European Union.
To issue the certificate, in addition to the existing project activities, an energy audit of the building will also need to be conducted. However, builders do not anticipate that this will result in a significant increase in costs. "The financial costs associated with this are on the order of tens of thousands of crowns and therefore will not affect the final price of the property for the client," said Martina Huclová from Metrostav to ČTK.
The energy efficiency of a building is expressed on a scale ranging from A to G. Category A comprises exceptionally energy-saving buildings, while at the other end of the scale are buildings with excessive energy waste.
For instance, apartments developed by Finep fall into category C according to the decree, said architect Luděk Hruška from Finep to ČTK. In terms of energy efficiency, they therefore fall into the category of compliant buildings. "If we wanted to reduce energy consumption to category B, it would mean a significant increase in construction costs, which would be reflected in the final price of the apartments," Hruška pointed out.
However, the architect does not believe that the value of inefficient apartment buildings will decrease due to the new measure. "I think that when considering apartment buildings, location and the quality of the apartment and the surrounding environment are much more significant price determinants," he stated. However, energy efficiency is expected to be a significant parameter, particularly for family homes.
In the case of commercial properties, the new regulation could affect rent prices, according to experts. "Buildings that have higher operating costs due to higher energy consumption should offer lower rents to remain competitive," said Bert Hesselink from the consulting company DTZ. According to Lucie Šindlerová from the consulting company King Sturge, service charges in office buildings account for 30% to 50% of energy costs, such as electricity, water, cooling, or heating.
"From the property manager's perspective, in the future, tenants will pay lower service charges in exchange for higher rent," concluded Šindlerová regarding the impact of the emphasis on energy efficiency of buildings.