Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.

London is currently one of the most competitive commercial property markets in the world. With an impressive transport network, highly-skilled labour force and relatively steady investment returns, multi-national businesses and investors see the English capital as the centre of European commerce.

However, rising energy costs are beginning to squeeze profit margins of London businesses, particularly smaller firms who find it difficult to adjust to inflationary pressures. Energy bills are expected to rise by 10 per cent next year; a survey by Uswitch also showed that average energy costs as a percentage of turnover went up a massive 70 per cent at the start of this decade.

You can encourage tenants to save money by reducing their overall energy consumption. Strategies like turning off computer equipment at weekends and evenings can reduce an office’s energy bill by up to 75 per cent. By turning your heating down a degree you can also save another 8 per cent a year. Utilising an office’s natural light and using energy saving bulbs can then also develop further savings.

Many new buildings are now designed to minimise energy usage and maximise overall efficiencies. Melbourne’s new CH2 building, a Six-Star Green-Certified commercial property, has created post-occupancy cost savings of around AU$2m, including energy consumption and water savings.

The UK Government now helps to cover the upfront costs of energy efficiency improvements in UK offices through its Green Deal scheme; allowing firms to recoup investments through cost savings from future energy bills. Energy saving improvements include insulation, heating, draught proofing, double glazing and renewable energy technology installation.

CIBSE state that high energy consumption can be driven by open-planned office designs, which require more energy to heat and light, air-conditioning, lack of wall insulation, high occupancy hours, unoccupied space, catering and sports facilities and computer rooms.

By switching supplier, many firms can find themselves saving money, with the average London firm potentially saving £1,936 every year, compared to the national average of £1,351:

“Despite the savings to be made, London remains relatively sleepy when it comes to switching,” said Nick Heath, commercial director at Make it Cheaper.

“But there are some hotspots within London – for example the most active areas are Belvedere, Sidcup, Upper Edmonton, Bethnal Green and Vauxhall.

“The least active areas with fewer than 5 per cent of companies actively switching are Hendon, South Kensington and Thornton Heath,” he added.

The propensity for firms to switch suppliers, however, is fairly low. Only 9 per cent of London firms said they were likely to move to another supplier in order to save money, in comparison to 15 per cent of firms in the rest of the country. This is particularly evident for firms in wealthy areas like Kensington, where costs are more easily absorbed.

For small businesses, reduced energy costs could make the difference between staying put or having to move out of London; make sure your tenants understand the importance of energy efficiency and encourage them to keep their costs down.

This article was written by Cathie Sellars, head of marketing at

Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.


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