New research 1 by re:sustain, the leading science-based technology platform which optimises the energy consumption of real estate assets, reveals that complexities around managing and coordinating with landlords and tenants is cited as the most pressing challenge facing European real estate investors, and is even more difficult to navigate than the financials, when it comes to improving the energy efficiency of their real estate assets.
Re:sustain's research with 200 European real estate institutional asset managers in the UK, Germany, France, Netherlands, Spain and Italy, with a combined AUM of €296 billion, reveals that finding ways to reduce operational disruption and build stronger tenant alignment are cited as the top two solutions that respondents believe would most accelerate action on energy efficiency across their portfolios.
European real estate institutional asset managers relationship with tenants is often complex and multi-faceted. When asked about the greatest challenge they face with tenants when it comes to driving improvements in the building's energy consumption, 72% of respondents cited getting tenant buy-in for these changes, followed by getting tenants to change their behaviours to help reduce energy use (58%). A third (33%) cited coordinating upgrades in multi-tenant buildings, with the same number saying the greatest challenge is keeping business disruption to a minimum for occupiers. Just 6% of respondents said updating leases to ensure tenants are using the building efficiently is the greatest challenge they face when it comes to improving the energy consumption of a building.
Almost three-quarters (72%) of respondents say that business disruption to their tenants or occupiers is such a significant barrier that it has become a reason not to proceed with building upgrades and improvements. In comparison, around one in 10 (11%) say it is only very slight or not a problem at all.
