Property Owners and Occupiers are in the Driving Seat of EV Adoption – Can You Afford to Fall Behind?

As part of the UK's target to reach Net Zero carbon emissions by 2050, the Government has committed to end the sale of new petrol and diesel vehicles by 2030 and phase out hybrids by 2035. The Climate Change Committee predicts that by 2030 there will be around 18 million battery and plug-in hybrid electric vehicles on the roads in the UK, rising to 49 million by 2050. To support this continued growth, it is vital that charging infrastructure is developed in parallel. The Government has committed to supporting this, announcing last November that they will invest £1.3 billion to accelerate the roll out of such infrastructure.

Owners and occupiers of real estate have an opportunity to play a key role in the deployment of this infrastructure by installing electric vehicle (EV) charging points on their properties. Those that fail to do so risk the appeal and value of their real estate assets decreasing.

Why is this important? 

Landlords 

As charging points will soon become a necessity for many, and with uptake already surging, EV charging points are an important service offering for landlords, both commercial and residential, to encourage lease renewal and attract new occupiers. With predictions that charging infrastructure will increase rental value and the value of private residential property, at least part of the cost of installation is likely to be recovered, even if not charged back to tenants.  

Retailers

Convenient parking has often been crucial to attracting customers and the provision of charging points will increasingly dictate what is convenient. For example, customers will expect and need charging facilities to be provided at retail stores, and retailers will risk losing customers if these facilities are not provided.

Retailers and retail park owners will need to install rapid chargers which are capable of charging cars to 80% in 20 to 40 minutes (as opposed to 3-12 hours for standard chargers). In a recent study, Savills found that retail sites with charging points saw a 50% increase in dwell time which is expected to result in an increase in spending.

With customers increasingly demanding that businesses are environmentally and socially responsible, they are likely to view favourably those that are making long-lasting sustainable changes.

Developers

There are an increasing number of legislative proposals that will have a direct impact on the real estate sector. New building regulations in the UK require the installation of:

One EV charging point in every new residential building with an associated car parking space.

For car parks with over 10 spaces, one in every 5 must have a charging point in new non-residential buildings and non-residential buildings undergoing a major innovation.

Developers will not only need to install charging points to comply with these obligations, but to future proof their portfolios and avoid expensive retrofits that, according to McKinsey, could cost up to five times more than deployment during initial construction.

Key Considerations 

There are a number of factors to consider before installing an EV charging point:

• Who will have the rights to use the charge points and have the necessary rights been granted? Will it be the public or occupational tenants only who have the right to use the points?
• What consents are required for installation? Have the requisite permissions been granted in the title documents or lease? Are there any restrictions preventing installation? Does the building insurer need to be notified and is landlord, superior landlord, and/or lender consent required?
• Will the landowner seek to outsource the provisions of these charging points (particularly the high-speed stations which require significant capital expenditure) or will it install and pay for them itself? If outsourced by way of a lease to an EV operator, could this give rise to any issues surrounding security of tenure and the 1954 Act regarding the statutory right of tenants to remain in occupation of premises after the lease term expires?
• Will the charging point be leased or purchased outright?
• Is the current electricity capacity sufficient for the occupier's needs and to run the charging points without interference with the other occupiers of the property?
• Is planning permission required? The development of charging points on private land benefits from permitted development rights provided various conditions and restrictions are adhered to, for example:
  • Wall mounted electric chargers for off-street parking must not exceed 0.2 cubic metres, face onto and be within two metres of a highway, be within a site designated as a scheduled monument nor be within the curtilage of a listed building (Schedule 2, Part 2, Class D of the Town and Country Planning (General Permitted Development) (England) Order 2015).
  • Upstands with an electric vehicle outlet mounted on them must not exceed 2.3 metres in height from the level of the surface used for the parking of vehicles (or 1.6 metres where in the curtilage of a dwelling house or block of flats), be within 2 metres of a highway, be within a site designated as a schedule monument, be within the curtilage of a listed building nor can there result in more than one upstand being provided for each parking space (Schedule 2, Part 2, Class E of The Town and Country Planning (General Permitted Development) (England) Order 2015 (as amended)).
• Can the current grants being offered by the Government be utilised to offset costs? For those that have dedicated off-street parking, the Electric Vehicle Homecharge Scheme (EVHS) provides a 75% contribution of up to £350.00 (including VAT) to the cost of one charge point and its installation. For further details see https://www.gov.uk/government/publications/customer-guidance-electric-vehicle-homecharge-scheme/electric-vehicle-homecharge-scheme-guidance-for-customers

There are a number of additional considerations that landlords must consider, for example:

• What will the impact be on rent review and future rent review?
• Where should the charging points be located and is this in the landlord's retained land or in an area demised to the tenant? Have the requisite rights been reserved for the installation? 
• For private landlords: Will/can charging, installation, repair and maintenance costs be recoverable as part of the service charge? Will they fall within the tenants repairing and insuring liabilities or will this remain the responsibility of the landlord? From a charging perspective, what happens if one tenant owns an EV but another does not?
• For commercial landlords: Large amounts of electricity will be required to operate multiple rapid chargers at commercial sites and consequently the infrastructure required, and its installation and maintenance, will cost a lot more than the installation of a standard charger in a residential location. The outsourcing of this could provide another income stream for the landlord and a profit share may be a beneficial way to arrange this for both landlord and operator.

Conclusion

The development of charging infrastructure is vital for meeting the current demand and future uptake of EVs. The deployment of this infrastructure presents an opportunity for those in the real estate sector to contribute to a fossil-free future whilst also increasing the value and appeal of their assets. With the future of EVs so certain, it is vital that owners and occupiers act now to avoid being left behind.