Almost half (44%) of sub-100k sq ft I&L space will be unlettable by 2027 under the government’s proposed Minimum Energy Efficient Standards (MEES), it’s claimed.

Under the proposed MEES timelines, by 2027 I&L facilities would need an EPC rating of at least C to be let. 

This will be tightened to a B rating by 2030. 

But new data from property company Potter Space shows that 79% of sub-100k sq ft I&L units do not meet EPC B standards, leaving them potentially unlettable by 2030.  

This represents a minor improvement since 2024, when 85% of small to mid-box units did not meet an EPC B or above rating.   

Jason Rockett, managing director of Potter Space, says: “A formal response to the 2021 MEES consultation was expected last year. 

“However, with less than 12 months until the first milestone, there is still no update from government, generating continued uncertainty for owners, investors and occupiers nationwide.  

“It’s not clear what the government will do, but the silence is deafening, and it’s vital for ministers to come forward on the MEES proposals. 

“Whether it’s implementation adjustments or extensive support, urgent clarity on next steps is needed. Without this, the ongoing supply challenge in this market will get significantly worse and businesses will suffer.”  

A Potter Space report – BIG Things in SMALL Boxes – takes an in-depth look at the sub-100k sq ft I&L market, often referred to as small to mid-box, which accounts for 95% of I&L units.  

Its findings highlighted that, alongside EPC challenges, another significant pressure for the sub-100k sq ft I&L sector was the decade of property undersupply.

This has been holding the sector back from achieving its full economic potential and leaving occupiers struggling to find sites as they scale and invest in new and larger premises.  

At a national level, from 2014 to 2024, demand has been suppressed by 35%, equating to an additional 60 million sq ft occupiers would have taken if it were available. 

Alongside planning reforms to address the under supply, the report proposes targeted support for the small to mid-box market to modernise existing stock. 

Proposals include coordinated industry efforts through a shared retrofit framework to enable collective procurement of energy efficiency technologies.  

It also calls for targeted grants for upgrades, tax relief for EPC improving works and incentivisation for solar PV panels.  

To download the full report, visit www.potterspace.co.uk/big-things-small-boxes-2026