UK’s hottest summer underscores climate risk costs for property

September 24, 2025

The UK commercial property sector is grappling with a new reality: climate risk is no longer a distant concern, it’s a day-to-day operational challenge. For building operations teams, extreme weather events are reshaping priorities, from tenant comfort to energy resilience and rising insurance costs.

Climate risk concerns surge across the sector

A recent survey of 150 senior property professionals found that 99% now cite climate change as a concern when buying a property, up from 72% in 2024.

Crucially, energy performance (65%) and heat stress (62%) now rank ahead of flooding (51%) as the biggest climate-related worries (Property Reporter). This shift highlights how climate issues are no longer just about long-term sustainability. They’re about resilience, asset value, and operational continuity today.

Heat stress: the silent operational threat

Summer 2025 was the UK’s hottest on record, with an average temperature of 16.1°C, exceeding the previous record set in 2018. That’s 1.51°C above the long-term average (UK Met Office).

Met Office scientists noted that a summer this hot is now around 70 times more likely because of human-driven climate change (Meteorological Technology International).

For commercial property operators, that probability means heat stress can no longer be treated as rare. Cooling systems, ventilation strategies, and indoor environmental quality must be robust enough to protect tenant comfort, or operators risk higher churn and reputational damage.

Insurance costs rising with climate damages

The financial consequences are also mounting. In 2023, UK insurers paid out £5.45 billion in property claims, the highest since 2007, with about £1.3 billion linked to storm and flood damage (Association of British Insurers).

The ABI has warned that “the cost of weather-related property damage is becoming more acute” — a signal that premiums will keep rising unless assets demonstrate resilience. For commercial landlords, failure to adapt could lead to punitive premiums or even exclusions from coverage.

The MSCI highlighted the gravity of the situation in a recent report:

“The physical impacts of climate change on the built environment are becoming more significant and have the potential to be extremely costly.” (MSCI)

From compliance to competitive advantage

Until recently, much of the focus in commercial real estate was on compliance - meeting Minimum Energy Efficiency Standards (MEES) or producing ESG disclosures. But investors, lenders, and occupiers are now scrutinising climate resilience directly.

Commercial buildings already account for around 20% of the UK’s carbon emissions (Moorcrofts), making operational efficiency and resilience planning central to both environmental and financial performance.

Tenants are also pushing for higher standards. Comfort, safety, and uninterrupted business operations are non-negotiables, particularly for office and retail assets competing to attract and retain occupiers.

The United Nations Environment Programme noted in a recent whitepaper,

“The financial sector is leading the transition to a lower-carbon future, and real estate asset valuations are increasingly tied to energy efficiency, making inefficient buildings tangible financial risks. Carbon pricing and operational cost impacts further influence these valuations.”

What operations teams can do now

For commercial property operators, resilience can no longer be bolted on, it must be embedded into strategy. Practical steps include:

Audit building systems: Identify HVAC, electrical, and water systems most vulnerable to heat stress or storm damage.
Track real performance: Monitor actual energy and water use against design expectations to close the “performance gap.”
Build tenant engagement: Share data and strategies with occupiers to align on sustainability and resilience priorities.
Plan for capital works: Factor in resilience upgrades - from insulation and shading to drainage improvements - in asset management plans.
Engage with insurers early: Demonstrating resilience planning can mitigate premium hikes and secure more favourable terms.
Leverage technology for resilience: Deploy advanced platforms that continuously monitor plant and equipment performance to identify inefficiencies, prevent failures, and improve sustainability outcomes. For example, CIM’s PEAK Platform uses AI-driven analytics to ensure buildings run efficiently, enhancing resilience while cutting costs and emissions.

Looking ahead

For UK commercial property, the message is clear: climate risk is no longer separate from cost risk. Rising heat, unpredictable storms, and stricter insurance markets are converging to make resilience a core operational issue.

As the Met Office warns, extreme summers are becoming the new normal. The operators who respond now - embedding resilience into day-to-day practices - will be the ones protecting asset value, controlling costs, and delivering safe, efficient, and comfortable workplaces in an increasingly unpredictable environment.