Real estate advisory firm Savills forecasts that rising energy prices will be a major challenge for commercial property landlords, managers and tenants in 2023. In response to market expectations, Savills has launched an interdepartmental service line dedicated to improving energy performance and helping identify ways to reduce annual energy consumption in buildings by up to 14 percent.
The current geopolitical situation has destabilised energy markets, with real estate also affected by rising electricity prices. Existing buildings account for close to 55 percent of the energy consumed by the construction industry globally and for over 35 percent of greenhouse gas emissions, while almost 75 percent of buildings in the European Union fail to meet energy performance requirements.
“The energy crisis across Europe has put the reliability of electricity supplies at risk. This also applies to office, retail and industrial buildings. Even if there is no blackout this winter, both landlords and tenants will be hit by soaring costs. The current market situation and new regulatory requirements regarding ESG reporting by companies call for taking urgent action on energy management and improving the energy performance of commercial buildings,” says Katarzyna Chwalbińska-Kusek, Head of ESG and Sustainability, Savills.
According to Savills guide to energy performance in commercial properties, energy management includes developing strategies to reduce energy consumed by buildings, cut air pollution and decarbonise assets. Energy efficiency allows for a permanent reduction in energy requirements through the installation of modern and more efficient equipment such as LEDs with a network of sensors or through optimisation of the most energy-intensive systems such as HVAC, among other things. These activities also affect the quality of the internal environment, i.e. whether buildings are user-friendly and positively affect their health, and thus their productivity.
“An energy audit is one of the most important tools in improving energy efficiency and managing energy consumption in a building. Modern building systems provide extensive data that must be properly interpreted to implement solutions that would make a building more sustainable and cheaper to operate,” comments Jakub Jędrys, Head of Building & Project Consultancy, Savills.
Not only landlords but also tenants and users of buildings can take action to reduce their energy consumption and carbon footprint. According to Savills, tenants account for up to 60 percent of the energy consumed in large office buildings. Supporting eco-friendly habits and spreading awareness among building users is a task for property managers, among others.
“With rising energy prices, improving the energy performance of buildings is expected to be an absolute priority for everyone in the months ahead. More and more investors are likely to take decisive action on this. To support our clients in this process, we have prepared a free guide for commercial property landlords and tenants. Drawing on our expertise and that of our partners specialising in energy contracting, we are well-placed to deliver a comprehensive service to bring down the costs of energy purchase and consumption and to ensure ESG compliance,” comments Michał Bryszewski, Head of Property & Asset Management, Savills.