The Growing Gap Between Rating and Reality in Commercial Refurbishments
In today’s commercial real estate market, sustainability credentials are no longer a nice-to-have. EPC ratings, electrification claims and net zero narratives now sit alongside location and specification as core drivers of asset value and lettability.
But as EPCs become more commercially influential, a growing gap is emerging between how buildings perform on paper and how they actually operate day to day.
A recent visit to a newly refurbished office building in central London illustrates this disconnect clearly.
EPCs – Reality vs Perception
A Refurbishment That Looks Right on Paper
At first glance, the building appears to tick all the right boxes:
- Completed within the last 12 months
- Marketed as having electric air conditioning
- Achieves a B EPC rating
- Promoted as a future-ready, sustainable asset
Office floors are served by new electric VRV air conditioning systems, which now provide the majority of heating and cooling to tenant spaces. From an EPC modelling perspective, this is significant. Electricity carries a lower carbon factor than gas, so electrification materially improves the building’s assessed performance.
On paper, the refurbishment looks like a success.
The Part That Wasn’t Refurbished
A closer look at the central plant tells a different story.
Despite the shift to electric VRV systems, the original gas-fired boilers remain in place. Their role has been reduced, but not eliminated. They still serve:
- Heating to common area stairwells
- Heating coils for two roof-mounted air handling units (AHUs)
These boilers were originally sized to heat the entire building. Post-refurbishment, they are now materially oversized for a much smaller residual load. Crucially, they cannot be fully shut down because the AHUs rely on continuous heat input.
As a result:
- The building remains operationally dependent on gas
- A large gas fiscal meter is still required
- Standing charges are incurred regardless of low usage
- Boilers must continue to be maintained, tested and eventually replaced
None of this is visible on the EPC certificate.
EPC Modelling vs Operational Reality
From a compliance perspective, the EPC is technically correct. The VRV system is rightly identified as the primary heating source, allowing the building to benefit from electricity’s lower carbon factor.
But the EPC does not reflect:
- The ongoing dependency on gas
- The inefficiency of retaining oversized plant
- The fixed costs and management burden that remain
This creates a clear disconnect between perception and reality.
Perception: A largely electrified, future-ready refurbishment with a strong B EPC rating.
Reality: A compromised hybrid system that still relies on gas, introduces avoidable cost and adds operational complexity for managing agents.
Why This Happens
There are familiar reasons why refurbishments end up in this middle ground:
- Removing central plant can be disruptive and expensive
- Retaining boilers avoids major alterations to distribution systems
- EPC improvement targets can often be met without full system replacement
In some cases, this is a deliberate strategy: achieving the desired EPC outcome with minimal intervention. In other cases, it is driven by programme, budget, or risk constraints.
The issue is not that EPCs are “wrong”. The issue is that EPCs are increasingly used as a proxy for sustainability, allowing buildings to be marketed as low-carbon even when known design compromises remain.
Designing for the Certificate, Not the Building
As EPCs become more commercially important, an uncomfortable reality is emerging. Some refurbishments are being designed to satisfy EPC software rather than deliver genuinely sustainable, operationally efficient buildings.
Design teams understand how EPC models behave. They know where carbon factors help, where assumptions can be leaned on, and how far a building can be pushed up the ratings scale without fully addressing residual fossil fuel dependency.
The result is predictable:
- Partial electrification that locks buildings into long-term gas use
- Stranded, oversized plant with limited purpose
- Higher and less predictable operational costs
- More disruptive and expensive retrofit pathways later
For asset owners and managing agents, the headline EPC rating can mask decisions that matter far more over the life of the building.
Why This Matters for Managing Agents and Asset Owners
The consequences of these decisions do not sit with the design team or developer long term. They sit with those responsible for operating and stewarding the asset.
This is where early-stage energy and services strategy becomes critical.
A more strategic approach asks harder questions upfront:
- If VRV systems meet most heating demand, does retaining gas plant still make sense?
- Can AHU heating be electrified or re-engineered?
- What is the long-term cost of standing charges, maintenance and future replacement?
- How does today’s design align with future regulation and net zero pathways?
These are not questions EPC software alone can answer. Too often, they are asked only after practical completion, when capital budgets are gone and options are limited.
At that point, owners face a difficult choice: accept a compromised system and ongoing cost, or invest further capital to re-engineer the building properly.
Closing the Gap Between EPC Perception and Reality
EPCs remain an important part of the commercial real estate landscape, but they are only one input. Buildings do not operate in EPC software. They operate in the real world.
A refurbishment that looks sustainable on paper can fall short operationally if central services are left unresolved.
The opportunity lies in moving beyond compliance-led design towards genuinely strategic refurbishment decisions that align marketability, operational efficiency and long-term decarbonisation.
Where Carbonxgen Comes In
This is where independent, real-world expertise makes the difference.
Carbonxgen works with asset owners and managing agents to look beyond the certificate, assessing how buildings actually operate and how today’s decisions shape long-term cost, risk and carbon performance.
If you are planning a refurbishment, managing a recently upgraded asset, or questioning whether your EPC rating tells the full story, let’s have a conversation.
Because future-ready buildings are not defined by what the EPC says, but by how they perform over time.