Energy efficiency is rewarded in rents, but not yet in sale prices
In our white paper, we present research on the impact of energy efficiency retrofit measures on rental returns and sale prices. Property surveyors and valuation professionals are taught the link between income, yield, and value of real estate assets. However, in the case of UK commercial real estate, energy efficiency is rewarded in rents, but not yet in sale prices.
The green premium is real, but highly selective. Most assets face brown discounts without a matching sales uplift, creating a mispricing between operational performance and capital value. Leases already reward efficiency; sales markets lag.
Efficiency is still the last untapped yield play in real estate. The question isn't if markets price it in — it's who gets there first.
In this paper, we reveal that there is a huge market opportunity for both core and value-add strategies, targeting energy efficiency improvements.
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Download the full white paper (PDF)
Want to discuss the findings or apply them to your portfolio? Get in touch.