Partnerships Forming To Unlock The UK Green Retrofit Market
The real estate industry in the UK, hindered by woefully limited data, continues to discuss sustainability from the side lines. For instance of the 1204 properties in the Investment Property Databank’s UK Commercial Office Sustainability Index sample, only 61 had sufficient data to be considered sustainable (based on 21 questions only). Without a significant data set with which to justify investment in sustainability, the market has, by and large, remained circumspect. But as usual, when some market actors adopt a wait-and-see attitude, others will strive to innovate without waiting for a rigorous quantification of the ‘green premium’ or ‘brown discount’. Take three recently announced partnerships: Brookfield Green, a partnership between Brookfield, Woods Baggot and WSP, the venture between GE Real Estate, Arup and Skanska, and the Threadneedle Low Carbon Workplace Trust (which includes The Carbon Trust and Stanhope) that were all recently brought to market to drive revenues from the trend to reposition existing buildings through retrofits designed with sustainability in mind.
These ‘early-mover‘ collaborations de-risk the proposition by spreading the financial risk amongst firms whilst simultaneously combining their expertise to unlock the investment and sustainability opportunities presented within the existing built stock. But what of the higher risks involved when pursing innovative strategies? The main market risk is timing, but the legislative hurdles continue to rise. From 2013 onwards, the recast version of the EU’s Energy Performance of Building Directive will apply a minimum energy performance standard for any building over 1,000m² which undergoes major renovations. With sustainability now a proxy for Grade A, the ROI of such investments will not only materialise through financial performance but also increased marketability for all stakeholders involved and will lead to stronger landlord and tenant relationships at an asset level.
- Tagged in :
- Smart Cities,
- Energy Management,
- Environmental Policy & Regulation,
- Carbon Strategy,
- Sustainable Real Estate
