Act now or risk stranded real estate assets, Colliers tells investors and owners in new ESG-focused paper

Rhea-AI Summary

Europe's Renovation Wave report by Colliers explores the accelerated asset renovation driven by regulatory and societal pressures. Retrofitting for net-zero carbon can lead to a 10% value uplift. However, uncertainties remain regarding funding and financing for upgrades. 45% of investors plan to dispose of up to 20% of their non-ESG compliant portfolio. ESG regulations continue to tighten, impacting the real estate market.

Positive

• Retrofitting for net-zero carbon can lead to a 10% value uplift

Negative

• Uncertainties remain regarding funding and financing for upgrades

LONDON, Oct. 02, 2023 (GLOBE NEWSWIRE) -- In their new report, Europe’s Renovation Wave, Colliers – a leading diversified professional services and investment company – explores the regulatory and societal pressures now driving an era of accelerated asset renovation, and the proactive actions investors, owners and occupiers can take, and are taking, to make sure their assets are not left behind and stranded in the race to decarbonise the built environment by 2050.

For those European real estate owners and investors already embracing their journey to net-zero-carbon through retrofitting, upfront spending has the potential for long-term rent and capital-value accumulation. Where significant energy saving modifications are introduced, Colliers estimates an average potential uplift of 10% in value via the capitalisation of an additional ‘energy rent’ at no additional cost to the tenant.

However, for many investors uncertainties prevail with 44% unsure how much funding would be required for retrofitting assets (estimating up to 10% of the value of AUM) and 50% not clear how these upgrades would be financed. Once audited for retro-fitting suitability, 45% of investors anticipate the disposal of up 20% of their portfolio (in next five years) where assets are deemed ‘non-ESG’ compliant.

“National and EU-wide goals for energy-efficient buildings are becoming transformational. Environmental, social and governance (ESG) regulations in relation to the built environment continue to tighten, impacting both occupiers and landlords/investors,” commented Andy Hay, Managing Director, EMEA Property Management and ESG at Colliers.

“When it comes to the real estate market, the EU believes that the rate of renovation needs to be at least double its current rate but this is still significantly behind the pace of change recommended by other leading industry think-tanks.”

Download and read the full report at colliers.com

Media contact:
Kate Martin, Associate Director, Content & Communications (EMEA)
Kate.Martin@colliers.com
+44 7780 025950

About Colliers:
Colliers is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn

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