Four Ten Apac Real Estate Investors Now Willing Pay Premium Sustainable Assets Jll Survey
Kamya Miglani, Apac head of research for work dynamics at JLL, noted that 44% of investors expressed concerns over assets losing value due to non-compliance or the inability to meet tenants’ sustainability demands. According to Miglani, this is due to stricter building regulations and international reporting standards that are compelling investors to apply a “brown discount” to non-compliant properties. As governments in Apac continue to strengthen building codes and mandate climate disclosures, this regulatory influence is expected to intensify.
Sustainability features have become increasingly critical for real estate investors in Asia Pacific (Apac), according to a study conducted by JLL. The research found that four in every ten investors intend to exclusively invest in properties with energy-efficient features and renewable energy access by 2028.
The findings reflect a significant shift from mere intent to action among investors when it comes to sustainability, according to JLL. Investors are now prioritizing measurable performance of buildings and integrating it into their evaluation and pricing of real estate assets, going beyond just green certifications.
In JLL’s survey, 63% of investors expressed that sustainability considerations have had an impact on their bid offers over the last 12 months. Four in ten investors have increased their offers for sustainable properties, while three in ten have reduced their bids or pulled out of deals involving non-compliant assets.
Kamya Miglani, JLL’s Apac head of research for work dynamics, noted that sustainability obsolescence has emerged as a major concern among investors, with 44% of survey respondents expressing worries about assets losing value due to non-compliance or an inability to meet tenants’ sustainability demands.
She attributed this to building regulations and global reporting standards that are compelling investors to factor in a “brown discount” for non-compliant properties. This regulatory influence is expected to grow as governments in the region tighten building codes and mandate climate disclosures.
In Singapore, more regulations are being implemented as part of the nation’s ambitious net-zero goals, including the upcoming Mandatory Energy Improvement Regime (MEI). The MEI requires owners of energy-intensive buildings to conduct energy audits and implement measures to reduce energy consumption, and is set to commence in the current quarter.
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Against this backdrop, Miglani argues that investors and owners need a comprehensive, data-driven strategy that balances upgrades with on-the-ground operational realities and the experience of tenants. “Those who get this right will not only comply with future regulations; they will position their assets to outperform the market,” she adds.
According to JLL, such upgrades offer attractive returns, with estimated annual savings of over $40,000 for light-touch retro-commissioning of a building’s systems. For more comprehensive retrofits involving upgrades to chillers and building management systems, the annual energy savings can reach up to $500,000 for a single commercial building.
Miglani concludes that as corporates and investors continue to prioritize climate-resilient assets, those who future-proof their portfolios today will gain a competitive advantage and secure long-term value.