Commercial mortgage holders 'need to consider sustainability'

31 December 2010

Written by Simon Whittaker

Commercial mortgage holders need to consider the sustainability of their properties, as tenants are increasingly looking for buildings with good green credentials.

This is the opinion of director of policy for real estate at the British Property Federation Ian Fletcher, who explained some occupiers have corporate and social responsibility policies that will drive them to look for environmentally-friendly workplaces.

As well as pressure from tenants, financial factors may lead landlords to put more emphasis on the energy efficiency of their properties in order to remain prosperous.

"We are just starting to see the environmental performance being reflected in valuations of buildings," Mr Fletcher stated.

If landlords do not take this into account "they won't be the best performing businesses in our sector," he warned.

Although it may become important for commercial mortgage holders to increase the energy efficiency of their buildings for future prosperity, recent research by the Investment Property Databank showed real estate owners are not yet seeing the benefit of going green, with those assets meeting stringent sustainability criteria offering a smaller return than those which are not as environmentally friendly since the first three months of 2008.

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