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05/28/2010 10:50
What's New
| NEW YORK – May 28, 2010 – One in five property professionals globally believe that 90 percent of the commercial real estate stock will still fall short of meeting good sustainable standards by 2020, according to an RICS survey of commercial property agents released today. The numbers are even starker at a regional level with nearly half (49 percent) of all property professionals in Latin America believing that it will take more than a decade for even a small minority (one in 10) of the commercial real estate stock to meet good sustainable standards such as those championed by LEED and BREEAM. Despite the general view that new buildings are meeting better standards, with new stock typically representing only 1-2 percent of existing supply in any one year, the survey of agents highlights the immense challenges governments face in putting idealistic real estate plans into action on a global scale. RICS believes that an urgent rethink to incentivize the refurbishment of existing stock should be seen as a top priority during the coming decade. “Almost any time that you can build ‘passive’ solutions, they will be low cost and fairly quickly recoverable without subsidy,” said Charles Warren MRICS, of Warren & Warren appraisal consultants in San Francisco. “More complex, costly and subsidy driven systems add political risk to a project.” The challenges appear bigger in the developing markets, with agents in Africa and the Middle East similarly pessimistic about meeting relatively modest targets within the next decade. Interestingly, agents in Emerging Asia and Emerging Europe were less pessimistic and more in line with the view in developed economies. The survey also found that most types of occupiers are starting to implement greater measures of sustainability with regard to their real estate requirements, with the biggest growth seen in the office sector ahead of industrial and retail sectors, respectively. Indeed, professional firms were reported to be leading the way in terms of implementing sustainable solutions, slightly ahead of the media industry and government occupiers in Q1 2010. That said, agents feel that small firms (less than 50 employees) are facing bigger challenges in implementing sustainable real estate solutions with this category a notable exception to the overall trend of greater implementation. This was the only category where declines in implementation were reported in the first quarter of 2010 compared to Q4 2009. “The findings of the survey clearly indicate that governments worldwide have a key role to play in providing the right sort of fiscal and direct incentives to raise the quality of the real estate stock,” said Ursula Hartenberger, RICS Global Head of Sustainability Policy. “This will send the right signals to skeptical investors who still remain concerned that the benefits of sustainable property do not outweigh the upfront investment costs. Crucially, developing government policies which incentivize the refurbishment of the existing stock may reap the greatest benefits in the coming decade. With mounting environmental legislation likely to affect the real estate sector worldwide, smart forward-thinking investment is simply risk-proofing the sector for the future and getting ahead of the curve.” Read the survey report here. ###
About RICS & RICS Americas RICS (Royal Institution of Chartered Surveyors), with headquarters in London, is the leading organization of its kind in the world for more than 100,000 professionals in property, land, construction and related environmental issues. RICS Americas, based in New York and covering North, Central and South America and the Caribbean, has more than 2,300 members in commercial and residential development, construction and project management, brokerage, planning and finance, valuation and fine arts appraisal. For further information visit www.ricsamericas.org or e-mail ricsamericas@rics.org. |