Big landlords believe tenants are willing to pay more for green features amid a growing recognition that sustainability sells.
According to Handelsbanken’s Property Investor Report, an overwhelming 92% of UK property investors say tenants will pay a premium for greener homes and commercial premises, with 77% reporting a surge in demand for heat pumps, solar panels, and electric vehicle charging points.
The report - based on a poll of 200 large portfolio professional landlords and property investors – reveals that 36% are more positive about the market due to proposed EPC reforms, while 56% see no negative impact.
Meanwhile, 47% cite demand for higher Energy Performance Certificate (EPC) ratings (C or above).
Richard Winder (pictured), head of sustainability, says investing in sustainable features offers a rare opportunity to woo good tenants, grow revenues and preserve financial value, while cutting long-term operating costs.
He predicts: “As regulations tighten and our worsening climate moves centre stage, the clamour for more sustainable and resilient buildings will only grow.”
This shift in tenant priorities comes as many large corporates are rethinking their sustainability targets, caught between rising costs and regulatory shifts such as EPC reforms and the Renters’ Rights Bill, reports Handelsbanken.
Its UK chief economist James Sproule adds that in a market where competition is fierce and tenants have choices, going green is the edge that can make the difference. “For years, green standards were seen as a regulatory headache. But our research shows that investors increasingly see them as an opportunity to add value. The message is clear, if you’re investing in property, sustainability isn’t optional anymore, it’s essential.”
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