Quarterly in Advance: Commercial Real Estate – what is on the horizon?

Contractual controls register – be ready to disclose

Part 11 of the Levelling-up and Regeneration Act 2023 sets out the framework for a new regime designed to improve transparency regarding land ownership and control of land. The underlying regulations have now been made and provide detail on the new regime.

There is now a duty to register information about options, pre-emptions and conditional contracts where those agreements allow an ability to control how land is used or developed. There are certain exemptions, such as short-term rights of control for less than 18 months. The regulations will come into force on 6 April 2027 but transitional provisions will apply to the period between 8 June 2026 to 6 April 2027 requiring registration of relevant agreements by 6 October 2027.

The digital platform for registrations is still being developed. In the meantime, parties should ensure relevant agreements are tracked now. Any relevant agreement entered into now will need to be registered come 6 April 2027 (and by the 6 October 2027 deadline). For agreements made after 6 April 2027, the information must be submitted within sixty calendar days.

Practical takeaway: for development land and strategic acquisitions, contractual control agreements are now a visible compliance item.

Energy: Minimum Energy Efficiency Standards (“MEES”) for commercial properties

On 18 June 2026 the Department for Energy Security & Net Zero and the Department for Business, Energy & Industrial Strategy made the announcement many have been waiting for in relation to MEES for commercial properties. The announcement is an interim response to the 2019 and 2021 consultations on strengthening non‑domestic MEES in England and Wales. The Government has confirmed its intention to implement the following:

• from 2031, it is proposed that all private rented non-domestic buildings over 1,000 square metres in England and Wales will need to reach a higher standard of energy efficiency of EPC B, where cost effective;
• the intention is for buildings below 1,000 square metres to continue to be subject to the current minimum standard of EPC E;
• the previously proposed interim EPC C milestone for 2027 will not be taken forward, giving landlords and tenants more time to improve the efficiency of their buildings in a way that suits their buildings and lease agreements; and
• existing flexibility mechanisms, including the 7-year payback test and exemptions, will remain in place ensuring that only improvements that are practical, affordable and cost-effective will be required.

Please note, the changes to raise MEES to EPC B for larger buildings will only take effect once secondary legislation has been made by Parliament.  The big questions now would seem to be:

• will any new prime minster and/or new chancellor have other plans?
• what does “cost-effective” mean in this context?

Practical takeaway: Energy upgrade costs and timing should be factored into asset management, leasing strategy and valuations.

Commercial leasehold to be less burdensome

On June 16 2026 the Law Commission released:

• part 2 of the Landlord and Tenant Act 1954 (“1954 Act“) consultation;
• the detail on the consultation on the Landlord and Tenant (Covenants) Act 1995 (“1995 Act“) and rights of first refusal under the Landlord and Tenant Act 1987 (“1987 Act“) (as far as the law relates to commercial premises); and
• a second sub-project on the law governing the maintenance, repair and upgrading of leased commercial buildings (with further detail to be released).

In terms of the 1954 Act, part 1 the consultation has already provisionally concluded that there should be no change to the model of security of tenure. Part 2 of the consultation will now look at increasing the threshold for excluding tenancies from the scope of the 1954 Act based on the tenancy’s duration from 6 months (as current) to 2 years, simplifying the contracting-out process and consider how the terms of a renewal tenancy are determined by the court and review the grounds of opposition to a renewal.

In relation to the 1987 Act and the 1995 Act, reforms are being considered with a view to:

• streamlining commercial leasehold transactions;
• decreasing bureaucracy, delay and costs; and
• aligning the reforms to the wider review of the 1954 Act.

Both consultations are open until 16 September 2026.

Practical takeaway: these are potential reforms to foundational areas of real estate law. One to monitor but change is likely to take time.

Insurance and landlord commissions

The London Trocadero (2015) LLP v Picturehouse Cinemas Ltd case was due to be heard in the Court of Appeal on 3 June 2026. The case concerned whether the landlord of commercial premises had been significantly overcharging its tenant insurance rent by taking a commission as part of the insurance premium.

The case has been settled out of court on a confidential basis so the many questions around the High Court decision will remain unanswered, until yet another case applies to the same issue. At a high level, the case determined that a standard tenant covenant to pay the landlord the amount payable for keeping the ‘property’ insured is unlikely to require the tenant to cover ‘commission’ payments made by the insurers to the landlord. The payments made by the tenant in this case were recoverable from the landlord as unjust enrichment. The point seems ripe for further litigation.

Practical takeaway: landlords should review insurance arrangements and drafting, while tenants may scrutinise recoveries more closely.

Ban on upwards only rent reviews: it is happening but when?  

The Government has implemented the ban on upwards-only rent reviews in commercial leases that was tucked away in a bill that mostly concerned matters of devolution. The English Devolution and Community Empowerment Act 2026 has received Royal Assent but the underlying provisions are yet to brought into force. For more detail, please refer to the previous edition of Quarterly in Advance: Commercial Real Estate – What is on the Horizon? – Wedlake Bell.

Practical takeaway: parties should begin considering alternative rent review structures, particularly for future lettings and renewals.

Still to come

Whilst many of the headline areas of reform are now a little more certain given the list above, there are still other areas of reform that we are yet to hear more on. These are:

Dates on the horizon

As a handy aide-mémoire, we list below the known dates for some key events in the real estate sector:

To close

Six months in, 2026 has already proven to be a year of significant change for the commercial real estate sector. Recent political developments mean we now await clarity on the next phase of leadership alongside key decisions around economic policy, spending and regulatory reform. While the immediate direction may evolve, reform of the sector remains firmly on the agenda.  We will continue to monitor developments closely and keep you informed. If you would like to discuss how these issues may affect your portfolio or activities, please do get in touch.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

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   • Gemma Cook

   • Knowledge Director
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