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European real estate asset values surge off back of greenium

real state, valuesOver half of Europe’s real estate managers have seen property values increase by up to 25%, according to research from ESG data provider Deepki, as sustainable properties continue to produce a 'green premia'.

Buildings deemed more sustainable with higher pricing power have triggered a rise in the value of assets for all 250 commercial real estate management professionals surveyed, the provider said.

The research, conducted by Pureprofile, covered real estate managers in the UK, France, Germany, Spain and Italy in the month of October 2022.

Over a quarter (29%) said real estate asset values had increased by between 11% and 15%.

Rising rental yields were also reported by 56% of managers, with yields increasing by between 16% and 25% as sustainable buildings continued to capitalize on reduced service costs as a result of improved efficiency measures.

Over half of respondents (64%) said industrial properties were most likely to attract a green premium, while 61% said residential properties and 48% said healthcare.

“Improving sustainability across real estate is not just demonstrably positive for the environment, it also improves returns,” said Vincent Bryant, CEO and co-founder of Deepki.

“Commercial real estate managers who are taking steps to understand and enhance their ESG credentials are helping to meet their Net Zero goals and deliver better performance for investors. Buildings with better sustainability ratings are more likely to be occupied which increases their overall rental income," he added.

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