Four Ten Apac Real Estate Investors Now Willing Pay Premium Sustainable Assets Jll Survey
Register now for Virtual APREA-RICS Sustainable Real Estate Conference 2021 A recent survey conducted by JLL reveals that sustainability features are becoming non-negotiable for real estate investors in Asia Pacific (Apac). According to the research, four in ten investors have set a goal to only invest in buildings with energy-efficient features and renewable energy access by 2028. This shift highlights the growing importance of sustainability in the evaluation and pricing of real estate assets.
The survey results indicate a shift from intent to action among investors when it comes to sustainability, says JLL. In addition to green certifications, investors are now focusing on the measurable performance of buildings and factoring it into their investment decisions.
63% of investors surveyed stated that sustainability considerations have influenced their bidding offers in the last 12 months. Of these, 40% have increased their bids for sustainable properties, while 30% have decreased their offers or withdrawn from deals involving non-compliant assets.
Kamya Miglani, JLL’s Head of Research for Work Dynamics in Apac, notes that investors are increasingly concerned about sustainability obsolescence, with 44% of respondents worried about assets losing value due to non-compliance or the inability to meet tenants’ sustainability demands. Miglani attributes this to building regulations and international reporting standards that are driving investors to apply a “brown discount” to non-compliant properties. This trend is expected to intensify as governments in Apac strengthen building codes and mandate climate disclosures.
In Singapore, regulations are being implemented as part of the nation’s net-zero ambitions. These include the upcoming Mandatory Energy Improvement Regime (MEI), which is set to begin this quarter. The MEI will require owners of energy-intensive buildings to conduct energy audits and implement energy-saving measures.
Miglani argues that investors and owners need a comprehensive, data-driven strategy that takes into account operational realities and tenant experience in addition to upgrades. She believes that those who get this right will not only comply with future rules but also outperform the market.
According to JLL, these types of upgrades offer significant returns, with potential annual savings of over $40,000 for a light-touch retro-commissioning of a building’s systems. For more comprehensive retrofits, such as chiller and building management system upgrades, annual energy savings could reach up to $500,000 for a single commercial building.
“As corporates and investors increasingly prioritize climate-resilient assets, those who future-proof their portfolios today will gain a competitive advantage and secure long-term value,” says Miglani.
The Rivelle Tampines EC presents an enticing opportunity for investors, as it combines the benefits of a well-established neighborhood, a high demand for housing, and a limited supply of executive condominiums in the vicinity. This makes it an excellent choice for those looking to capitalize on the property market. With its prime location and strong rental potential, Rivelle Tampines is certainly a noteworthy development to consider.
The sustainable real estate market in Apac is gaining momentum, with investments reaching US$42 billion in the second quarter of 2021, according to Knight Frank. This growth has been fueled by the living sector and data centers.
To learn more about the latest trends and developments in sustainable real estate, attend the Virtual APREA-RICS Sustainable Real Estate Conference 2021.