ESR has launched a 2030 roadmap for sustainability.
The Asia Pacific real estate investment manager said the new ESG 2030 Roadmap built on achievements under the 2025 roadmap, launched in 2020.
Jeffrey Shen and Stuart Gibson, ESR co-founders and co-CEOs, said: “Since the launch of the ESG 2025 Roadmap in 2020, we have taken big strides forward in our ESG journey. We continue to raise the bar on our ESG actions and impact, creating long-term value for our stakeholders.”
Since 2020, ESR, which has $150 billion of assets under management, has installed nearly 100MW of rooftop solar power capacity across its portfolio, exceeding its initial target of 52 MW by 2025. It has also improved the male/female staff ratio to 55/45 from 60/40 and secured sustainability certifications for 39% of its portfolio, as well as securing $3 billion of sustainability-linked loans.
The 2030 roadmap targets include achieving a 50/50 gender balance, sustainability certifications for 50% of the portfolio and creating an ESR Group Foundation programme with an investment capacity of up to US$20 million.
The most ambitious target is to install 1,000MW of rooftop solar capacity across the group’s portfolio, which has 45 million sq m of gross floor area.
Embassy Office Parks REIT has launched a plan to spend more than $35 million on sustainability initiatives.
The Indian real estate investment trust has committed INR3 billion ($36.4 million) to double its solar energy capacity to 240MW of on and offsite power. Last week it launched a 20MW rooftop solar project as part of this programme.
The REIT, which owns office properties in Mumbai, Delhi, Bangalore and Pune, aims to achieve 75% renewable energy usage by 2025 as part of its commitment to hit net zero carbon in operations by 2040.
CEO Vikaash Khdloya said: “Keeping sustainability as a core focus, we continue to deliver and operate world-class, wellness-oriented workspaces for our occupiers and their employees.”
Knight Frank has teamed up with Zestec Renewable Energy for a new UK solar power venture.
The partnership with Zestec, which is owned by renewable energy investor Octopus Energy, is designed to accelerate the adoption and rollout of fully funded rooftop solar PV systems across the UK. It will allow Knight Frank’s clients to implement rooftop solar PV systems without any up-front capital expenditure.
Zestec will implement a Power Purchase Agreement (PPA) model, which includes fully funding the capital and operational expenditure of each solar asset, allowing businesses to benefit from "significant savings" from onsite renewable power with no up-front cost. The PPAs will run for 10-30 years with various options at expiry.
David Goatman, head of energy, sustainability and natural resources at Knight Frank, said: “As businesses across the UK seek to reduce their carbon emissions and deal with high energy costs, it is imperative they embrace affordable and sustainable alternatives to fossil fuels. Solar power is the most cost-efficient form of onsite renewable energy generation at most of the property assets we deal with.”
Simon Booth, CEO of Zestec, said: “We have an ambition to scale in this exciting sector of the renewable energy market, an ambition Knight Frank also share.”
Johnnie Wilkinson, chief executive of Greenman Group, talks to Sustain about the investment manager’s programme of onsite power generation and diversification.
Greenman’s OPEN fund is the largest owner of food-focused real estate in Germany, with €1.09 billion of gross assets, and is targeting Net Zero by 2050. Generating onsite power through solar PV will be part of this and Greenman is also seeking to cut food miles by investing in vertical farming. These new business lines will also provide diversification of income; Greenman is targeting 5% of income from non-rental sources by 2025.
The motivation for this diversification has been the changing relationship between landlord and tenant, says Wilkinson. “The idea that a landlord buys a property and has this passive income for a significant period of time, has really changed. The landlord, and ESG is one driver of this, is obliged to take a much more operational approach to the building and become closer to the tenant,” he says.
“I really believe that in years to come, rent will be a small proportion of the revenue a landlord collects from that tenant. Ancillary services such as energy will end up being a more significant part of the total.”
Supermarkets are well suited to solar PV installation, because they are single storey buildings with a big roof space. “And secondly the energy consumption by grocers is huge, because of the cold storage,” says Wilkinson. “In an inefficient building, the energy consumption is getting on for 600 kilowatt hours per square metre per year.”
Rooftop solar PV can generate about half of that – in theory. In practice, supermarkets need power when solar is not generating and might not need what is being generated sometimes, for example on a sunny Sunday afternoon. Wilkinson says: “A challenge for us is to work with tenants to understand how they can maximise onsite power use. Moving heating from gas to air source heat pumps is a major win, especially for older buildings. In a best-case scenario, the stores can use 80% of what is generated onsite.”
The next stage is to alleviate heat loss from fridges and freezers, which can be as much as 70 kilowatt hours per square metre per year. Wilkinson believes the long-term solution will be for the landlord to provide energy-efficient cold storage as part of the lease contract.
There is also a challenge in asking tenants to renegotiate their energy contracts, which are typically signed with a single power company for a large portfolio of stores. “Entering into energy contracts with us as opposed to a single agreement is operationally more of a hassle for them, but they see it as a winning point because it is a good story for their customers and they have their own ESG requirements,” says Wilkinson.
Car parks are an obvious location for solar PV and there is German legislation demanding it, which has been largely ignored. “The problem is that tenants do not like anything which obscures view of their stores and branding from the road and street level.,” says Wilkinson. “Nonetheless we are working on it and plan to have 80% of our car parks covered by 2042.”
Battery storage forms part of the plan to maximise onsite power use, however the problem with this is large batteries of the type needed cannot hold power for long, certainly not long enough to run fridges and freezers overnight. In order to use more power onsite, Greenman is installing EV chargers which work well with battery storage. “The more energy we use on site, the better. If we sell it to the grid, we get seven cents per kilowatt, but we get twice that from the tenant,” says Wilkinson.
He predicts that the intersection of real estate and energy will become more and more important. “There is going to be a very big business around owning the ability to generate renewable energy in real estate.”
Vertical farming has been touted as a solution to the conundrum of consumer desire for fresh produce all year round and the need to reduce food miles. It has proven a difficult and expensive business thus far, however structural trends in urbanisation, population growth and a growing middle class in developing nations support its long-term potential.
Greenman has a vertical farming subsidiary, Potager Farms, and will develop the concept at a number of its stores. “We are working with a few tenants to see what we can do to grow locally out of season and help with their Scope 3 emissions,” says Wilkinson.
He believes the real future of vertical farming could be somewhere different, however. “In the long term, where it's really going to be successful, is not at the grocery store, where we're trialling it at the moment, it's going to be in the distribution centres. You can grow incredible amounts of vegetables in a relatively small area, more than one tenant can sell in a day. Whereas if we were to place a vertical farm inside the distribution warehouse, where their lorries are distributing to 10- 20 different stores in a day. That's where scale meets demand.”
As part of its Net Zero journey, Greenman has pledged, wherever possible, not to demolish any of its buildings, instead: “We will repurpose them. So vertical farming might take up first floor units that will never be rented to a retailer. Or an area of car parking that's not required.”
The final part of Greenman’s sustainability plan is to invest in food-linked social projects, which will meet the coming commitments for Greenman OPEN, which is set to convert to become an Article 9 fund. Wilkinson says: “We in the process of converting our open-ended fund into an Article Nine fund, so we will commit to social activities and enabling activities education on solar, food and nutrition. We are going to commit about 0.5% of NAV per year to these initiatives, which doesn't sound much, but the NAV is more than €700 million, so we can do something material.”
Kennedy Wilson has installed 850 kWp of solar panels at one of its a UK office assets.
The US real estate firm installed solar PV across five office buildings at The Heights, Weybridge, near London.
The project is forecast to generate over 736,000kWh of electricity in the first year.
Sam Cookman, director of property management at Kennedy Wilson, said: “We are very pleased with the results of the project so far and have plans to take forward similar projects at other properties we own.”
Knight Frank advised Kennedy Wilson on the project. David Goatman, partner and head of energy, sustainability and natural resources at Knight Frank, said: “The economics for such projects have changed dramatically over the past 12m and are now compelling from both the climate and financial return perspectives.”
Savills Earth has appointed Daniel Richardson to lead its solar consultancy service across the UK.
Richardson is based in Aberdeen but will cover the entire UK. He has a research background in renewable engineering and experience in the design, delivery and operation of solar PV systems, most recently with Powerstar and Styles & Wood Group PLC.
Thomas McMillan, director of energy at Savills Earth said: “With escalating electricity costs coupled with many companies setting net zero targets solar deployment has never been more important. Daniel’s appointment provides the Savills Earth with a solar specialist who can help get solar panels on roofs and in fields to meet these primary drivers.”
CBRE Investment Management has announced plans to develop solar projects across its global logistics portfolio.
The manager has joined forces with Altus Power, a clean electrification company, in the US and Europe to establish solutions focused on decarbonization and resiliency, including the development and installation of solar power generation, battery storage and electric vehicle charging systems.
CBRE IM has a logistics portfolio spanning 17 countries worldwide, with more than 600 assets totalling 200 million sq ft.
“We are focused on deploying onsite solar projects across our logistics assets where viable in order to advance our sustainability goals and support the transition to clean energy,” said Chuck Leitner, CEO of CBRE IM.
“We look forward to expanding our relationship with Altus Power across core markets in the US and Europe as we scale to make our portfolio more resilient, profitable and sustainable.”
Earlier this year, CBRE IM announced its first agreement with Altus Power to build and operate a portfolio of rooftop community solar projects on logistics facilities in Maryland, US.
Earlier this year, Trammell Crow Company, another CBRE subsidiary, announced a strategic partnership to bring Altus Power’s clean energy solutions to 35 million sqft of industrial assets in the company’s U.S. real estate development pipeline.
Logicenters has announced plans to install the largest solar park in the Nordics on the roof of a logistics centre near Stockholm.
The logistics specialist, a unit of investment manager NREP, will install solar panels on the roof of DLS Bålsta, which covers an area of around 80,000 sq m. The facility is expected to provide an output of approximately 8.9 MW at full operation, which corresponds to an annual production of 7,880 MWh and will allow the tenant, Axfood, to use renewable energy.
Energy will be provided to Axfood via a power purchase agreement whereby the company purchases all electricity produced over the next 25 years, with the opportunity to resell any surplus production.
Matthias Kettelhoit, CEO of Logicenters, said: “Logicenters has installed just over 20 PV projects, which we hope to double in partnership with our tenants. The rooftops of logistics properties provide a fantastic opportunity to save CO2 by becoming a significant producer of renewable electricity that can be used by both tenants and external parties, with surplus going into the grid.”
SP Setia has signed a memorandum of understanding (MoU) with Malaysia’s national electricity provider to add renewable energy solutions to the developer’s projects.
The partnership with Tenaga Nasional Bhd will enable the installation of rooftop solar across SP Setia’s portfolio as well as ensuring upcoming residential and commercial development projects are ready to support the installation of battery solutions.
Listed developer SP Setia has 41 projects underway which could benefit from the partnership. Malaysia’s Net Energy Metering quota allows ‘excess’ electricity from solar panels to be exported back to the power grid.
S P Setia president and chief executive officer Datuk Choong Kai Wai said: “We are pleased to sign this MoU with the national utility provider. This is an achievement in collaboration to provide sustainable energy solutions to our future property owners with the potential for significant savings in energy consumption as added value.”
