Accordng to predictions in a new commercial real estate forecast, based on the opinions of 600 industry experts, 2011 will not be the turnaround year that the European real estate industry had hoped for, with a “two-speed” market likely to emerge that reflects a widening gap between investment hotspots and second-tier property markets.
Respondents in Emerging Trends in Real Estate 2011, published by PwC and the Urban Land Institute (ULI), expect more industry downsizing across the continent.In the face of this, sustainability will become directly connected with high quality real estate said the report.
This marks a shift for 2011 and beyond, positioning sustainable buildings as healthier, more attractive, and more marketable. Meanwhile, the capital value of nongreen buildings will fall in the future, the survey indicated.Interviewees commented that sustainability had become “front and centre,” and “unavoidable.”
Despite only representing 2% of the market, investors say “green is the new standard” in the report. It is the value that tenants now place on green buildings that is driving these changes. Tenants increasingly are looking for ways to drive operating costs lower and for energy-friendly buildings that reinforce their corporate social responsibility missions, people surveyed said.
While there was some evidence of tenants paying more for green assets, that view was by no means widespread. Experts admitted while sustainable buildings do not attract higher rents, they lease well in a weak market.
The wider knock on effects of sustainable investment were also becoming clear according to the report, with respondents saying it contributed to smoother relationships between real estate firms and planners, drove operating costs lower, and was contributing to attracting talent, who increasingly questioned companies on their CSR credentials.
Source: propertytalk Live!