Entitled Sustainable Commercial Property, Sustainable Venture Intelligence’s latest analysis report series examines the current landscape in the UK’s sustainable commercial property market, critically analysing the impact of short-, medium- and long-term government interventions and targets, the increasing drives among developers and landlords to implement sustainability measures, and the inherent opportunities for investment and growth.
Most of the current focus in the industry has been on taking advantage of the emerging market for low carbon new builds. With the government targeting 2019 as the year when all new builds will be zero carbon and SVI analysis suggesting that annual investment in the sector will have reached £30bn by 2030, there is clearly a sizeable market in sustainable construction, forecast as it is to see a compound annual growth rate of 5-10%. However, less attention has been given to the fact that over 60% of today’s buildings will still exist in 2050, contributing up to 45% of total floor space. Obligations and sustainability initiatives requiring retrofits and performance improvements over the short, medium and long term all offer potential for investment opportunities with sizeable returns.
Though investment is restrained at present, there can be no doubt that non-domestic property is a significant area of focus in relation to UK carbon emissions and the targets in the 2008 Climate Change Act. These buildings are responsible for around 18% of the UK’s total carbon emissions and improvements in performance have been negligible since 1990.
Despite related regulation such as Buildings Regulation Part L, Energy Performance Certificates (EPCs), Display Energy Certificates (DECs) and renewable-inclusive planning guidelines (e.g. the ‘Merton Rule’), existing buildings still perform poorly. Under the requirements of the Climate Change Act which state that emission of all greenhouse gases must be reduced by 80% against 1990 levels by 2050, the average non-domestic building must knock 95kg CO2/m2 off its current performance.
Clearly, delivering this reduction in existing stock will create opportunities and the sector must improve and innovate around sustainability to do so.
Key Findings Sustainable Venture Intelligence’s Sustainable Commercial Property report include:
- While dragging existing, poorly-performing buildings up to industry standard is clearly important, the collection of data and certifications for the better-performing properties in any given stock will at least provide some respite from the threat of obsolescence to both finance and reputation.
- Developers, too, can benefit from paying attention to existing stock. Implementing schemes such as the Low Carbon Workplace and exercising greening and retrofitting measures in conversions present reputational benefits as well as sustainable advantages to each project.
- Opportunities may also arise in the public retrofit market: there is a broad scope for renewable energy technologies and strong commitments to CO2 reduction have led to a greater tolerance of higher capital costs.
- Local authorities wishing to make positive environmental changes would be more likely to swiftly approve planning permission for construction that is similarly forward-looking
SVI’s report on the UK’s sustainable commercial property market provides proprietary analysis and insight into legislation affecting the sector and evaluates a range of strategies for improving sustainable performance. It also identifies a number of potential growth areas in the sector through extensive market assessment across consumer needs, current financial trends and in-depth case studies of development pipelines, at a time when coherent commentaries on opportunities in both the new build and retrofit markets are few and far between.
SVI’s Sustainable Commercial Property series takes in the complete spectrum of stakeholder concerns, from developers and construction companies to investors and corporate venturing teams. Whatever the nature of your involvement in commercial property, SVI’s targeted and comprehensive research and analysis provides clear insight into a sector in which the nature of opportunities is not always apparent.
You can access their latest reports here and if you quote discount code “CNMedia” you can get 15% off the standard price.