FP Show 2022: High EPC-rated developments will pay dividends, claims Roma Finance MD



Knowledge Bank’s development finance Criteria Clinic held at The FP Show 2022 brought into light the importance of high EPC ratings for development projects.


The session — hosted by Knowledge Bank’s founder and CEO Nicola Firth — welcomed Richard Whitehouse, MD at Sancus, Juliet Baboolal, partner at Seddons, Scott Marshall, founder and MD at Roma Finance and Shahil Kotecha, CEO and principal at Pivot.

When asked about what considerations the lenders are giving to ESG, all panellist confirmed that EPC ratings are a big factor when assessing development finance deals — in fact, Richard said that for Sancus, a new build scheme that does not have a B EPC rating would be a red flag.

Following on this, Scott also pointed out the value of delivering energy-efficient schemes for developers themselves, as the higher the EPC rating is for a project, the better the GDV will be, based on the current demand for energy efficient properties.

To illustrate this, Scott spoke about a three-home Passivhaus development in Scotland that Roma Finance funded — while the estimated GDV for each property was £400,000, the three homes ended up being sold for between £650,000 and £665,000, thanks to the high energy efficiency of the properties.

“It will cost more to build, but the end values will be so much higher — put more in, and you’ll get more out,” he concluded.

However, asked about whether carbon emissions are also taken into consideration when considering a deal, Shahil candidly said that at the moment, this is not something that Pivot itself is assessing.

“The truth is, we are not set up to look at these factors — that’s not to say it’s not important though,” he stated.

However, he believes that carbon emissions will be taken into consideration more in the future.

 



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