Lesson #1
Conviction comes first
Slättö's conviction, based on evidence and market trends, is that sustainability investments can create value in three ways:
Income returns through lower operating costs and higher net operating income, capitalised in higher asset value.
Risk mitigation through reduced liquidity risk.
Capital returns through more attractive assets, supporting potentially tighter exit yield.
In segments where the asset owner typically bears the energy costs, lower opex translates directly into higher net operating income; in segments where the tenants bear the energy costs, lower tenant opex can support rent increases.
This conviction has shaped Slättö's capabilities, processes and determination to capture the opportunity. The starting point was a simple question: Which energy efficiency improvements create sufficient commercial value?
To answer it, Slättö:
Gathered evidence on the commercial potential of different energy improvement projects.
Established a profitability framework, requiring energy projects to deliver a Yield on Cost comfortably above the asset yield.
Committed to systematically identifying and executing projects that met those investment criteria.
How we do it
Evidence and considerations in energy capex cases
The investment case for energy improvements is assessed from three perspectives.
Income returns
Higher NOI, higher asset value
Evidence
Through energy projects at attractive Yield on Cost, Slättö has:
Reduced opex in residential, where Slättö pays heating costs.
Enabled rent uplift in logistics and light industrial, where tenants pay all energy costs.
Risk mitigation
More resilient, liquid assets
Evidence
Difficult to finance assets with the lowest energy rating.
International investor surveys suggest yield expansion and lower interest for brown assets at transaction.1
Capital returns
Potentially trade at tighter yields
Evidence
A valuation study in Sweden shows premium in price per sqm for properties with EPC rating A-C compared to F-G.2
Notes:
1 JLL Investor Survey: 69% of investors noted a dip in value (0-100 bps) for brown assets; 35% decided not to bid based on sustainability
2 Newsec 2025: Premium up to 15% in price / sqm in Swedish Residential and office, after controlling for key asset type differences