Assessing and Managing the Environmental Risks of Property Ownership

Abstract

Examines the environmental risks involved in managing and investing in commercial/industrial property in the UK. Looks at some of the questions which prudent landlords should now be asking of their tenants in order to assess these risks, and concludes that an environmental risk rating system should be developed and adopted by those responsible for managing and investing in commercial and industrial property. Quite simply according to the Royal Institution of Chartered Surveyors, 1993, “...all those involved in the appraisal of land and buildings need to include environmental factors in their considerations...” and a system which can allow this to take place should be thoroughly debated by the profession. It is also suggested that tenants who are adopting policies to regulate their environmental performance offer landlords an inherently less risky investment from an environmental perspective. The strength of the occupying tenant′s covenant should also be an integral part of any assessment of potential environmental risks which face property managers.