(Credit: Pixabay)Sustainable buildings have increased the asset values for commercial real estate managers in Europe, according to research from Deepki.
More than half of the commercial real estate managers say property values have increased between 16% and 28% because of a green premium, which is the added value of using more sustainable offerings because tenants are willing to pay more for more efficient buildings. More than a quarter of respondents say their rental yields have increased for green buildings.
The industrial sector is the most likely to use sustainable commercial real estate, according to 64% of the respondents. Healthcare followed, with 48% of respondents saying the sector is most likely to use green buildings, and retail came in at 45% according to the research. The sector having the least impact in terms of sustainable space was lodging and resorts, which came in with 4% of the responses.
A third of the respondents also say vacancies have decreased by as much as 15% for sustainable buildings, with 36% saying their void periods have fallen by up to 25%.
“Commercial real estate managers who are taking steps to understand and enhance their ESG credentials are helping to meet their net zero goals and deliver better performance for investors,” says Deepki CEO Vincent Bryant. “Buildings with better sustainability ratings are more likely to be occupied which increases their overall rental income.”
Buildings are a significant source of emissions worldwide, with a growing focus on lowering their carbon footprint.
The World Economic Forum reports that green certifications of properties can result in a rent premium of 6% and a sales premium of 7.6%. Still, the WEF says retrofits to make improvements in existing commercial real estate are at around a 1% to 2% rate and it will take $5.2 trillion over the next decade to decarbonize the built environment and green real estate.
In the United States, the Department of Energy says 30% of energy from commercial buildings is wasted.
Improvements can be made through operations such as automated building management systems as well as efficient lighting and heating and cooling systems. A four-building office complex in Atlanta is an example of a commercial property taking on those efforts in an attempt to be one of the most sustainable developments in the area, including a 1-megawatt solar plant on site.
Earlier in 2022, Measurabl acquired Hatch Data to improve its smart ESG management platform for commercial real estate, including tools to meet carbon goals and compliance needs, as an illustration of a system to help monitor building sustainability. Deepki also has an ESG data intelligence platform to help commercial real estate investors and operators with net-zero efforts.
The Deepki research was conducted with 250 commercial real estate management professionals from the United Kingdom, Germany, France, Spain, and Italy.
