investors sustainable assets
The percentage of investors who view sustainability as one of their most important selection criteria has been steadily growing

More investors than not now view sustainability as critical in asset selection decisions, real estate services firm CBRE’s global Investor Intention Survey has shown for the first time in its four-year history.

The percentage of investors who view sustainability as one of their most important selection criteria – and who will not invest in assets that don’t meet sustainability targets – has been steadily growing, hitting about 21 per cent in 2018.

At the same time, there has been a sharp decline in those who do not view sustainability as an important asset selection criterion – plummeting from 24 per cent to 15 per cent in just a year.

The Europe, Middle East & Africa (EMEA) region was the strongest in factoring sustainability into investment decisions, with just four per cent saying it was not important. The Asia-Pacific (APAC) region had 12 per cent of investors saying sustainability was not an important factor, rising to 23 per cent in the Americas, which dragged up the average.

CBRE said recent research had found sustainable certified buildings – which have tripled in floorspace since 2007 – attracted higher rents.

“In addition, this research has found lower interest expenses associated with investment in more sustainable properties,” CBRE senior global research analyst Siena Carversaid.

“It would therefore appear that, rather than having to sacrifice returns to achieve sustainability targets, investors can benefit financially from achieving them.”

The results of the survey show that investors are starting to take this on board and implement it in asset selection decisions.

Wellness another key trend

Investors are increasingly having to pay attention to the social aspects of sustainability, too.

CBRE also released an occupier survey for the EMEA region (those for the APAC and global markets are yet to be released), finding that wellness is emerging as a key trend. Ninety-two per cent of occupiers in the region said they preferred “wellness-capable” buildings.

“To respond to demand, occupiers have been turning to standards such as the WELL building certification scheme to improve and advertise the standard of their workplaces,” Ms Carver said.

She said the introduction of such standards were “not simply a marketing gimmick”, pointing to a recent studyshowing that workplace performance improved when wellness-related schemes were implemented.

“With ‘green’ building certification becoming increasingly mainstream, I would expect wellness to be the next frontier,” Ms Carver said.

Investor interest in co-working strongest in Asia-Pacific

Co-working was also noticed as a significant trend, particularly for the APAC region, where a third of investors labelled it “the future of office work”, higher than in any other region surveyed. Additionally, 29 per cent of investors saw co-working as an amenity for other tenants in the building, while 20 per cent said it enhanced income from a building in the long term.

APAC investors named flexibility as the most important occupier trend for 2018. This aligns with co-working centres named the third-most preferred location for occupiers to increase space over the next two years.

Globally, investors said 20 per cent of an office building was the most optimal percentage for co-working space. Most investors saw a positive impact on property value when co-working operators as tenants occupied up to 40 per cent of a building.

“In general, investors looking to gain their exposure to the co-working trend intend to partner with third-party co-working operators as they are still evaluating and testing the sustainability of the flexible space concept,” the Asia-Pacific Investor Intention Survey 2018 said.