More investors making ESG-led decisions, Colliers says
A growing number of real estate investors are integrating ESG considerations into their strategies, new research from Colliers reveals.
The broker’s 2024 Global Investor Outlook found that, while Europe may be leading the way on regulation to embed ESG in the built environment, the global nature of investment means standards are being raised across the board.
“Our survey of investors shows an expanding acceptance that ESG is a key strategic element of investment decision-making, particularly in the EMEA and APAC regions,” the report says.
"The proportion of investors moving to the phase of ESG-based disposal and acquisition strategies has reached 25%, compared to just 10% two years ago. As a result, a wave of disposals and value-add opportunities are coming to market."
Colliers predicts that the “brown discount” for non-compliant assets will grow to make repositioning them a worthwhile endeavour. Damian Harrington, head of research, global & EMEA capital markets, says: ““The view is that many of these brown assets that are not fit for purpose won’t be cheap enough for a profitable exit after repositioning. But once we see the brown discount reflected, investment volumes will pick up considerably as there is plenty of stock to green up.”
Investors expect the value premiums for ESG-compliant assets to range from 8% for retail properties to 22% for industrial and logistics assets over the next three years.