Andrew Chambi

What CRREM stranding risk means for London office owners

By Andrew Chambi · 19 October 2026

A lot of my work involves running buildings through CRREM. The output is usually a chart with two lines on it and a year where they cross. People tend to fixate on that year, and I understand why. It looks like a deadline. But it's worth knowing what it actually measures before you make decisions off the back of it.

What CRREM is

CRREM stands for Carbon Risk Real Estate Monitor. It started as an EU-funded research project and is now run by the CRREM Foundation. It publishes decarbonisation pathways for different types of property in different countries. Each pathway is a line that falls over time, showing how much energy and carbon per square metre a building can use and still be in line with keeping warming to 1.5°C.1

You take your building's real performance, plot it against the right pathway, and see where you sit. Below the line, you're aligned. The year your building rises above the line is the one everyone asks about.

It's not called the stranding year any more

For years that crossover point was called the "stranding year". In July 2025 CRREM renamed it the misalignment year.2 The maths didn't change. The name did, because "stranded" suggested a building would definitely lose value, and the tool doesn't predict that.

I think the change was sensible. A building that crosses its pathway in 2029 isn't worthless in 2029. What CRREM is telling you is that the building is out of step with where the market and regulation are heading. Whether that turns into a real financial hit depends on things CRREM doesn't model: what tenants want, what lenders ask for, how long the leases are, and what it would cost to fix.

You'll still hear "stranding year" in meetings and in older reports. They mean the same thing.

Two lines, two different answers

CRREM gives you an energy pathway and a carbon pathway. They often give different years, and the gap between them tells you a lot.

Carbon depends on the fuel. The UK grid has got much cleaner over the last decade and is expected to keep going that way. So an all-electric building sees its carbon intensity drop year on year without anyone touching it. A gas-heated building doesn't get that help. Two offices with identical energy use can end up years apart on carbon simply because one burns gas.

The energy line is less forgiving. A cleaner grid does nothing for it. The only way to stay under it is to actually use less energy.

When I see a building that looks fine on carbon but misaligns early on energy, that usually means it's electric but inefficient. When it's the other way round, gas is normally the problem. Each needs a different fix.

Why this matters more now: EPC B in 2031

CRREM is voluntary. Minimum energy efficiency standards are not. Since April 2023 it has been unlawful in England and Wales to keep letting a commercial property rated below EPC E unless an exemption is registered.

In June 2026 the government published its interim response on the next step. Non-domestic buildings over 1,000 square metres will need EPC B from 2031, where the improvements pay back within seven years. The EPC C milestone that had been pencilled in for 2027 has been dropped, and smaller buildings stay at E for now.3 A full response is still due and the regulations still have to go through Parliament, so details could move.

For a typical central London office, that 2031 date and a CRREM misalignment year are often in the same window. That's when it stops being a reporting exercise and starts showing up in valuations and refinancing.

Why London offices are exposed

A lot of the stock is older, and much of it was fitted out for full floors five days a week. Things that come up again and again:

  • Gas boilers still doing heating and hot water
  • Plant running on fixed hours regardless of how many people are in
  • Building management systems set up years ago and never revisited
  • No meaningful data on tenant energy, which is often the biggest slice

What I'd tell an owner to do

  1. Get proper data. Use real metered energy for the whole building, tenant areas included. A misalignment year based on estimates or landlord-only meters isn't worth much. This is the step most people want to skip.
  2. Fix how it runs before what it's made of. Plant hours, setpoints and controls are cheap to sort out. They often move the misalignment year further than people expect.
  3. Plan the big spend around the lease cycle. Heat pumps, lighting, glazing and fabric work are expensive and disruptive. Doing them at a lease break or planned refurb is far cheaper than doing them in a hurry.
  4. Model the options. Run each intervention against both pathways and against the EPC. Spend first where it moves the dial most.
  5. Bring tenants in early. Green lease clauses and data sharing make a real difference in multi-let buildings. Tenants increasingly have their own targets, so it's often an easier conversation than it used to be.

In short

The misalignment year is a warning, not a verdict. Most buildings can push it back a long way with good data, better operation and well-timed upgrades. The ones that struggle are usually the ones that found out late.

References

  1. CRREM Foundation, pathways and tools.
  2. CRREM Foundation, press release on the misalignment year, July 2025.
  3. Jones Day, Non-domestic MEES: government confirms EPC B target for larger commercial buildings from 2031, September 2026.

More writing by Andrew Chambi