- High interest from occupiers and investors in ESG-compliant properties
- Investments in sustainability amortise after 7.5 years on average
- Investments of 10 euros/m2 reduce CO2 emissions by 2.2 kg per year
Investors in the logistics sector are willing to pay significantly higher prices for sustainable logistics properties in Europe, according to a recent analysis by Cushman & Wakefield, one of the world's largest real estate consultancies. According to the study, properties with high sustainability standards achieve a price premium of 19 per cent compared to those that do not.
The study included over 1,500 transactions* and more than 1,800 buildings with a floor area of at least 10,000 square metres, which were analysed over the past five years. A price premium of 24 per cent can be seen, particularly outside the top locations, which once again underlines the focus of investors on sustainable properties.
For many tenants, compliance with sustainability criteria for the property they use is now a top priority, as the buildings are generally more energy-efficient and therefore cheaper to run. The analysis makes it clear that properties rated as sustainable not only attract tenants more easily, but also minimise the risk of vacancies.
‘For our multinational clients in particular, new lettings that do not meet the ESG targets they have set themselves are a de facto exclusion criterion and are increasingly a decisive factor in a tender situation. This is a trend that we have been observing for some time in highly transparent and competitive markets such as Poland and which is also slowly but steadily increasing in Germany,’ explains Hendrik Jung, Head of Logistics & Industrial Leasing at Cushman & Wakefield Germany.
Stephan Haegele, Head of Logistic & Industrial Capital Markets at Cushman & Wakefield Germany, also points out that older properties in particular need to be adapted to today's expectations in order to survive on the market in the long term and not become stranded assets. Both users and investors attach great importance to sustainability aspects in their decision-making processes. Targeted investment in existing properties is therefore not only sensible, but also necessary in order to make them fit for the future.
Long-term amortisation and positive environmental effects
According to the report, investments in green technologies pay for themselves after an average of 7.5 years. One example: Investments of 10 euros/m2 in CO2-reducing measures** lead to an annual reduction in emissions** of 2.2 kg/m2. Photovoltaic systems prove to be the most effective measure for reducing CO2 emissions and energy costs.
Sustainability features are also playing an increasingly important role in the financing of logistics properties. Investors can obtain more favourable credit terms and extended financing limits if they invest in sustainable buildings. In addition, increasing regulatory requirements and reporting obligations, particularly in the context of the EU taxonomy, are putting pressure on investors to upgrade their properties in terms of sustainability in order to avoid losses in value.
‘Investment standards are already developing beyond the current regulations. Early action to fulfil market and regulatory requirements is the key to remaining competitive in the future,’ summarises Tina Reuter, Head of Germany at Cushman & Wakefield.