The increasing importance of Responsible Property Investment in commercial real estate

Date: 21st November 2013

Commercial Real Estate is changing. Since the global economic downturn, commercial real estate has to endure some hurdles and pitfalls including falling valuations, lenders withdrawing and funding limited as a result. This has seen the industry look to new opportunities and business models that leverage the efficiencies inherent in responsible property investment and with this we are witnessing a greater emphasis from both investors and occupiers for greater focus and transparency regarding sustainability performance.

The role of sustainability in property investment is about creating value, reducing cost and protecting assets from early obsolescence. Growing investment from stakeholders coupled with increased regulatory and transparency requirements are driving the sustainable agenda as part of the commercial considerations in property.

Now real estate investment institutions are integrating the management of sustainability risks of analysis at fund level as part of their asset management plans. Many are now operating to monitor specific targets, specifically analysing detailed sustainability reporting. Increasingly landlords are wishing to recoup the benefits of managing assets more efficiently with the specific intention of engaging with occupiers and influencing their actions and encourage capital investment.

Tenant engagement will improve occupier knowledge of their own energy efficiency and thus encourage them to take more responsibility to take action. This allows landlords to support occupiers where energy efficiency is a priority and bring forward capital expenditure plans where appropriate.

Property fundamentals such as rents and vacancy rates are impacted by weak economic growth and factors on tenant retention, rental growth, refinancing and asset values. This is creating the industry to focus the previously undervalued areas of cloud computing, analytics and sustainability to identify new opportunities apposite current market conditions and opportunities.

Further to this the increase in legislative compliance requirements, investors are actively seeking to understand the business value of sustainability and emergence of innovative solutions and business models. This is leading to CRE organisations seeking to identify appropriate tools and processes that track and monitor the performance, enable comparisons against benchmarks and assist in timely reporting and disclosure to internal and external stakeholders.

New technology such as Carbon Estates is beginning to impact the industry and the harnessing of ‘Big Data’ in a strategic way is making valuable sustainable performance information more transparent in real estate. Carbon Estates offers a software application for delivering commercial real estate improvement analysis to determine retrofit strategies for mitigating risk and improving financial performance of commercial real estate.

Carbon Estates offers fast, efficient and detailed energy modeling and analytics for every building in a commercial real estate portfolio allowing investors to quickly gain an insight into performance and efficiency opportunities. Propagated by a comprehensive on-site energy audit accompanied by operational performance data; Carbon Estates is able to model operational performance efficiencies and benchmark them against as-built design standards to illustrate relative performance based on occupational trends and behavior.

If you would like to discuss the opportunities to improve your commercial portfolio’s performance and mitigate the risk associated with inefficient buildings then contact us on the website quick contact form.

Posted in: Latest News

Tags: Commercial Real Estate, CRE, Sustainability, Sustainable Risk