While sustainability is still just a buzzword for many business owners, real estate investors are beginning to see its potential realized.
A lot of buyers now demand sustainability reports from companies before investing their hard-earned money. In 2019, green features have moved from the nice-to-have category to much-needed mechanical and technological upgrades.
According to a SmartMarket report, global green building is on the rise, with the number of green buildings doubling every three years. Real estate developers across regions like Germany, the US, and the UK forecast that over 60% of their projects will be green in just a few years. What’s more,93% of large global firms now issue sustainability reports for their investors
Sustainable Commercial Real Estate
Investors are rapidly finding out that sustainable practices not only improve the reputation of their projects in the market but also deliver strong fiscal results.
Even though there are many misconceptions associated with sustainable practices within the real estate market, the data continues to prove otherwise.
Here are the top three factors that help increase their value in the real estate market:
Shorter Payback Periods:
Green buildings utilize features like smart lighting and HVAC systems to increase efficiency. Not only are these features less costly than traditional counterparts, but they also increase the value of the building exponentially.
With market demand for suitable real estate doubling every three years, investors are likely to shorten the payback period to just a few years, leading to much faster returns.
Low Operational Costs:
Green buildings offer great opportunities to save on energy and operational costs. According to a recent report, green buildings cost 14% less in operational and maintenance costs compared to traditional buildings.
Sustainable technologies such as passive cooling systems and motion sensor lighting can reduce the amount of energy consumed by the building and reduce the cost of utilities by a wide margin.
The low operational costs attract more investors, increasing the market value of the real estate exponentially.
With increasing awareness around the deteriorating global environment, many buyers and renters are looking for properties that offer energy-efficient solutions.
A well-renovated building with a low carbon footprint attracts more prospective tenants, thereby increasing market value. Commercial real estate owners can charge high rents and get higher returns on investment by developing sustainable buildings.
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