ESG Property Investor Survey
ESG considerations are becoming pivotal in real estate investments, with a focus on sustainability, risk reduction, energy efficiency, and transparency
The ESG Property Investor Survey reveals several key findings:
1. Growing Demand for Sustainable Assets: Approximately 77% of surveyed investors have set minimum environmental criteria for new acquisitions, with over 50% of them requiring a minimum B rating, in alignment with the proposed Minimum Energy Efficiency Standards in the UK by 2030.
2. Risk Mitigation and Net Zero Strategies: 74% of investors employ CRREM analysis for their current portfolios, and over 50% use it for acquisition due diligence to minimize risks and work towards net-zero objectives.
3. Standardized ESG Due Diligence: 61% of respondents require an EPC Plus/Pathway report before acquisition, as preparation for upcoming regulations and to understand necessary measures to meet minimum requirements.
4. Efficiency Improvement: Investors actively seek to acquire underperforming assets with poor EPC ratings, aiming to upgrade and reposition them. Impact funds have been launched for this purpose.
5. NABERS Adoption: 44% of investors own or are developing NABERS-rated buildings, while 68% require energy use data before acquisition. This indicates a growing interest in building performance transparency.
6. Standardization of Green Leases: All surveyed investors use green leases, with 36% linking compensation to ESG objectives. Green leases are increasingly employed to help investors achieve their ESG goals by facilitating data sharing on energy, water, and waste.
In summary, ESG considerations are becoming pivotal in real estate investments, with a focus on sustainability, risk reduction, energy efficiency, and transparency. As the push for net zero intensifies and regulations evolve, ESG-related due diligence and strategies are likely to become even more critical for property investors.
