A new lease of life? Investigating UK property investor attitudes to low carbon investment decisions in commercial buildings

摘要

This paper reviews the barriers and drivers for energy efficiency investment decisions in the commercial property sector in an effort to find signs of a new lease of life in the sector. A review of both the academic and ‘grey’ literature shows that the primary barrier is the lack of a compelling business case, as buildings with improved energy efficiency do not command premium rents or capital values. The UK Government has introduced policy drivers aimed at influencing change by requiring the mandatory improvement of poor energy performing buildings and tougher building regulations on new property. Senior UK-based investment decision-makers are interviewed to understand ‘real-life’ perspectives on how energy efficiency drivers affect the market and their decisions. The interviews reveal that where the business case justifies, investors will take a beyond compliance approach, but otherwise, there is little appetite for such initiatives. The market is coping with the government’s mandatory approach because the cost of compliance is manageable. However, the relatively low cost of energy within total business costs means that interest by landlords and tenants in reducing energy continues to be weak and this will present difficulties if policies are extended to capture more properties. Further research is recommended to see whether these conclusions are representative of the wider market.