Thursday, 11 September 2014

A REIT Green Result for the EU and Asia

Written by Julia Butterworth
CBRE Energy & Sustainability

If you missed it, last week the Global Real Estate Sustainability Benchmark (GRESB) announced its latest, and highly anticipated, annual report.

The report presents average performance scores for all participants, within both ‘Management & Policy’ and ‘Implementation & Measurement’ on a quadrant that maps respondents from ‘Green Starters’ up to ‘Green Stars’.

The top performers, or ‘Green Stars’, are those companies that can demonstrate they measure, implement, manage and develop sustainability credentials as an integral part of their business operations.

Largely aimed at institutional investors to gauge and drive the sustainability performance of real estate portfolios, the GRESB survey analyses data from listed property companies and private equity real estate funds globally. In total, the respondents’ portfolios cover 56,000 buildings with an aggregate net value of €1.6 trillion.

Green EUreka Moment for EUrope

More than half of the world’s green stars are now domiciled in Europe, with the number more than doubling from last year to 115, and European participants gaining an average score of 47.

To put this in perspective, the US saw its number of green stars increase by more than 100% yet still trails Europe quite significantly with just 48 stars overall, and US participants landing an average score of 44 points between them.

This acceleration in Europe can be attributed to a number of factors including green lease clauses, associated tax breaks and the drive amongst fund managers for green building certification.
The rationale for owners and occupiers is to drive both carbon and cost reductions, as well as demonstrating operational transparency to investors.

As macro-economic conditions  continue to stabilise across Europe, “green” is once again rising up the corporate agenda. As a region Europe looks set to rival the Pacific, which still leads the GRESB ranking table with an average score of 61 .    

Green Star for Asia as it pips North America to the post

Real estate investors and developers in Asia are also making significant progress, particularly with ‘green’ commercial property operations and management.

Year on year, the participant rate increased by 24%, with a total of 92 respondents dominated by Japan, China and Singapore.  The overall average GRESB score for Asia’s participants increased by 23 per cent, from 37 to 46 points,  tip-toeing past North America for the first time, resulting in 35% of Asia’s total participants being identified as green stars.

The core area of “green” achievements in Asia were around monitoring and environmental management systems, as well as management of sustainability risks; outperforming their European counterparts in both of these areas.

The future’s bright – the future’s green

Like its European counterparts, the expectation is that Asia’s commercial property market will continue its upward sustainability trajectory.

It is anticipated that GRESB  will increasingly play a role in driving the real estate industry towards an efficient and transparent future, encouraging ‘green’ to be standard practice through uptake of green lease clauses, certifications, and facilitating positive changes to the traditional landlord-tenant relationship.

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