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Winter 2022 27 www.hae.org.uk www.eha.org.uk The 2022 RICS Sustainability Report, which collated responses from around 4,000 chartered surveyor contributors, around 1200 of which are from the UK, across commercial and construction sectors globally, shows the push for sustainability has gained a modest pace over the past year, notably in the commercial real estate sector as demand for green buildings continues to rise. But there has been little or no change in many areas. In construction, a significant share of professionals say they do not measure carbon emissions on projects. Looking at investors and occupiers separately in the UK, around 65% of contributors note that occupier demand for green/sustainable buildings has risen over the past 12 months but the UK is falling behind Europe as a whole, where around 52% of contributors across the region have seen a modest increase in demand, and just under one-quarter state that occupier interest in green/sustainable buildings has increased significantly. On the investment side, around 45% of survey contributors in the UK report a modest increase in investor appetite for green/sustainable buildings, which is 5% higher than the global average. A further 21% suggest there has been a more significant increase in demand. Across Europe, around 80% of those surveyed have seen an increase in investor demand for green/sustainable real estate over the past year. As demand for sustainable buildings continues to increase not just in the UK but on a global scale, it is impacting both rents and prices, with a significant share of contributors seeing a market premium for sustainable buildings, and citing that non-green real estate assets are subject to a ‘brown discount’. For those buildings that aren’t classed as green or sustainable, 48% of respondents noted a reduction in rents, and around half also cited a reduction in sale prices in the UK, with both figures lower than as can be seen in the whole of Europe, where 57% of respondents noted ‘brown discount’ for rental properties, and 60% noting a ‘brown discount’ in prices. The majority of UK respondents (55%) noted a rise in climate risk assessments by investors on their built assets, suggesting that climate issues are now rising up the agenda and could be influencing the behaviour of key market players. << UK responses to RICS report reveal divide in ‘greener building’ demand. SUSTAINABLE BUILDINGS STATUS LAGS BEHIND EUROPE