According to the CBRE Sustainability Index, which has tracked commercial real estate in the UK since its launch in Q1 2021, energy-efficient commercial properties have delivered total returns of 16.2%, compared to 11.2% for conventional properties.
In the second half of 2024, energy-efficient properties posted slightly higher total returns (5.6%) compared to other properties (5.4%), with capital value growth of 1.7%, versus 1.4% for non-"green" properties.
Energy-efficient properties also saw stronger rental value growth, reaching 2.4%, compared to 1.5% for less efficient properties in the same period.
Offices
The performance gap between energy-efficient and non-energy-efficient office properties continued into 2024. In the second half of the year, energy-efficient offices saw total returns of 3.1%, compared to 2.7% for others. Rental growth for energy-efficient offices was 3.4%, more than double that of conventional offices, which saw 1.6%.
Warehouses
Energy-efficient industrial properties showed slightly higher total returns and capital growth, though there were no major performance differences between efficient and non-efficient properties in this sector. In the second half of 2024, total returns for energy-efficient industrial properties were 8.7%, compared to 8.1% for conventional ones. Capital value growth was 3.3% for energy-efficient properties, while it was 2.9% for non-efficient properties. Energy-efficient industrial properties also posted stronger rental growth at 3.1%, compared to 2.0% for traditional properties.
Retail
While energy-efficient retail properties outperformed their non-efficient counterparts, this trend is partly due to the composition of the sample. The performance gap persisted into 2024, but both categories of properties benefitted from the improving market conditions. Total returns for energy-efficient retail properties were 4.6% in the second half of 2024, compared to 4.1% for non-efficient properties. Capital value growth was 1.4% for energy-efficient properties, while it was 1.2% for non-efficient ones. Rental growth for non-efficient retail properties was stronger, reaching 1.2%, compared to 1.0% for energy-efficient retail spaces.
