Why energy performance is now part of investment performance

A chain of interlinked forces is reshaping the economics of real estate. Rising climate-related costs, tighter regulation, and higher energy prices are accelerating the need for a transition towards more efficient and resilient assets. What was once primarily a sustainability issue is increasingly becoming an investment issue.

Buildings account for a significant share of Europe's energy consumption and emissions. Structural trends including AI's large energy demand will continue to put upwards pressure on energy prices. As a result, institutional investors, lenders and tenants are placing greater emphasis on energy performance.

For real estate owners, the implications are significant. Energy performance increasingly affects operating costs, NOI, tenant attractiveness, financing conditions, liquidity, exit pricing and portfolio resilience.

Energy efficiency also creates broader benefits, including lower emissions, stronger alignment with investors' climate targets and, at a societal level, reduced energy demand and greater energy independence.

Real estate investor surveys show that energy performance, retrofit economics and regulatory requirements are increasingly incorporated into investment decisions. At the same time, many market participants expect a significant share of today's building stock to become increasingly difficult to finance, lease or sell in the coming years.