Climate may have impact upon property market – commercial mortgages

28 November 2006

Property investors, such as those with commercial mortgages, are being warned that climate change may affect the commercial property market due to new legislation and tenant requirements.

A new study by King Sturge states that changing attitudes and policies towards the environment, such as corporate social responsibility initiatives, may have an impact upon rental values, the Scotsman reports.

The firm argues that the introduction of new legislation to tackle climate change could lead to new trends within the market, as investors respond to both the law and occupier demands.

"This could lead to dramatic events in the commercial property market throughout Europe, with investors disposing of inefficient stock, upgrading those buildings which can be adapted and demanding much higher energy efficiency from new buildings," the company states.

A recent report by the Department for Environment, Food and Rural Affairs, claimed that 44 per cent of national emissions are produced by "industrial, commercial and public sector" buildings.