This report provides a comprehensive analysis of the relationship between sustainability credentials, rental growth, and investment value within the industrial and logistics market. By examining data from 133 million sq. ft. of leasing transactions, conducting a solar survey with 20 companies, and engaging 125 participants across 80 firms in a sustainability survey, we uncover key insights into how sustainable practices impact asset performance.
The findings reveal that properties with strong sustainability credentials not only attract higher rents but also deliver greater investment value and resilience in the market. This report serves as an essential guide for investors and developers, offering practical tips and insights into ways investors and developers can capitalise on the evolving landscape.
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Our 7 Key Findings
1. Investors are becoming sustainable investment intelligent, with 74% considering ESG in every transaction and 56% costing decarbonisation pathways during acquisitions.
2. Despite no legislative pressure, the market is targeting Green+ refurbishments driven by perceived rent and yield premiums.
3. The rental premium between EPC A and B is widening, but there is no premium for EPC A+.
4. The rise of green capital is not only targeting prime assets, offering a yield improvement of 10-25 bps but also paying a premium for assets that have a clear decarbonisation strategy.
5. Net zero pressures have redefined the transaction process, 70% of purchasers are requesting consumption data during transaction due diligence.
6. Power is the biggest challenge to the industry, 59% of developers have abandoned an acquisition due to power concerns.
7. Flood has been identified by 83% as the greatest physical risk but climate-related risks are not considered a priority.
