Environmental Lease Clauses

11 Jun 2014

The inclusion of environmental clauses in leases is increasingly common across the industry and is standard Hammerson practice

Environmental clauses are becoming a standard feature of leases as both occupiers and landlords seek some level of assurance in this area. As buildings are developed and delivered to higher environmental standards using industry benchmarks such as BREEAM and LEED, it is becoming ever more critical to include clauses which underpin and safeguard that environmental performance. This may be as simple as a commitment to share environmental data.  With the forthcoming introduction of Minimum Energy Performance Standards it is now important to ensure the energy rating of an asset is maintained.  This is particularly critical for retail assets as the retail fit out has such a significant impact on the energy performance of the unit.

What we do

Environmental clauses in our leases include agreeing to share data, ensuring any upgrades are done to energy and water efficient standards, maintaining BREEAM ratings and EPC ratings and, where appropriate, linking in to district systems.  We have used the industry guidance provided by the Better Buildings Partnership to work with our lawyers to develop these clauses for our UK assets.  In France, under Grenelle II legislation, environmental clauses are a legal requirement in new leases as are environmental addendums for all existing leases

Environmental Memorandums of Understanding and Addendums

Whilst environmental clauses are now included in our new leases, existing leases which may have been signed many years ago, do not necessarily have them. In France it is now a legal requirement to attach Environmental Addenda to all existing leases.  In the UK this is not the case but it is possible to sign an Environmental Memorandum of Understanding with occupiers that applies to an existing lease.  We have done this with M&S on some of the units they occupy in our UK portfolio. More information on environmental clauses in leases and on MoUs can be found on the Better Buildings Partnership website.