Tuesday 12 April 2016

Green tech ‘could boost office buildings’ value by up to $35bn’

Green tech ‘could boost office buildings’ value by up to $35bn’

Sustainable technologies could help US businesses reduce their buildings’ annual expenses by 3% to 30%, depending on the city.

That’s according to a new report, which suggests savings could potentially add between $3.5 billion (£2.5bn) to $34.9 billion (£24.6bn) to the value of assets in the 10 largest commercial real estate markets in the US.

Technologies that businesses could implement include ultra-efficient LEDs, smart meters and renewable energy.

It also details the yearly utility savings in each of those 10 US cities, ranging from $2 million (£1.4m) in Philadelphia to $239 million (£168m) in New York.

That potentially adds $489 million (£344m) to $4.8 billion (£3.4bn) of asset value, Morgan Stanley Institute for Sustainable Investing adds.

Landlords across the top 10 office markets in the US are said to spend nearly $7.4 billion (£5.2bn) on utilities every year.

It estimates the US commercial building sector could an additional $290 billion (£204bn)  in present value over the life of a $125 billion (£88bn) investment in reduced energy expense alone.

Cutting water use in commercial buildings by just 10% would save roughly two trillion gallons of water per year, resulting in reduced costs.

The built environment is a major source of greenhouse gas emissions – responsible for nearly 33% of global emissions. Globally buildings consume roughly 40% of energy and 25% of water.

The report goes on: “Our analysis shows that building efficiency technologies are linked to a positive impact on energy expense, water expense and financing cost. In our view, investors can potentially reap financial benefits across key areas including revenue, financing costs, operating expenses, capital expenses and property appreciation.

“As cities around the world continue to expand, we believe that sustainability is a new frontier of available opportunities for potentially improved investor return in office buildings (and other property types) within major markets.”

Written by

Bruna Pinhoni

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