Executive summary
NZC Consultants has analysed 2,400 non-domestic EPC lodgements across England and Wales from the 12 months to September 2026 to estimate sector-level readiness for the proposed 2031 EPC B requirement. Only 18% of the analysed stock currently sits at EPC B or A. Sector dispersion is wide — logistics leads, offices and retail lag — and the underlying driver is consistent: gas heating in the SBEM CO₂ calculation.
Methodology
Sample of 2,400 non-domestic EPC lodgements weighted toward large urban markets (London, Manchester, Birmingham, Bristol, Edinburgh). Includes office, retail, logistics, mixed-use commercial. Rating taken at most recent lodgement; results expressed as the share of sample (count-weighted, not floor-area-weighted). Smaller secondary stock outside the sample is likely to underperform these figures.
By sector
- Logistics and industrial: 31% at EPC B or A — driven by recent build and rooftop PV.
- Offices: 14% at EPC B or A — penalised by gas heating in the SBEM CO₂ calculation.
- Retail (high street and shopping centre units): 11% at EPC B or A.
- Mixed-use commercial: 16% at EPC B or A.
Why this matters
The office sector carries the largest aggregate gap to 2031 compliance. Most of that gap is concentrated in pre-2000 stock with perimeter gas heating — where solar PV alone cannot resolve the SBEM CO₂ rating and the credible compliance route is electrification of heat. The retail sector is structurally similar but with more constrained capex envelopes and shorter typical lease terms.
Implications for fund managers
- Office-heavy portfolios are 2–3x more exposed to MEES 2031 capex than logistics-heavy peers.
- Provisioning should reflect £300–£600 / m² capex on the Red-list cohort.
- GRESB and SDR disclosures should explicitly identify the non-B share at portfolio level.
- CRREM trajectory typically correlates with MEES rating — integrated capex narrative supports both disclosures.
Implications for asset managers
- Re-lodge EPCs older than 5 years before classifying readiness — methodology updates can shift bands.
- Sequence works against lease events; logistics PV-led upgrades typically deliver fastest.
- Office upgrades require DNO and heat pump lead-time planning 24+ months out.
Recommended actions
- Use the 18% benchmark as a portfolio comparator in LP and GRESB reporting.
- Run sector-weighted capex stress tests for 2031 EPC B and 2030 CRREM alignment.
- Prioritise office and retail capex; defer logistics PV-only assets to later cycles.
Key takeaways
- 82% of UK non-domestic commercial stock needs intervention to reach 2031 EPC B.
- Office and retail face the largest capex gap.
- Logistics is the bright spot — PV and recent build drive a 31% readiness rate.
Sample weighted to large urban markets. Smaller secondary stock may underperform these figures.