Rates of Retrofitting buildings, considered essential to reduce energy costs and help combat the global energy crisis, need to treble to meet the goals in the Paris Agreement, according to new research.
JLL’s Retrofitting Buildings to be Future-Fit research warns that net-zero carbon (NZC) intervention measures directly impact a building’s bottom line and that failing to decarbonise leads to “significant financial risk”.
Decarbonisation targets
For many buildings, meeting 2050 decarbonisation targets put forward in the Paris Climate Agreement is grounded in retrofitting current spaces, which can also garner higher rents, reduce financial risk and generate higher occupancy rates and tenant satisfaction.
JLL’s research reveals that in the global north, retrofitting rates need to triple from barely one per cent today to at least three per cent of existing buildings per year to meet decarbonisation targets.
An estimated $3tn will be required in the office sector alone to meet these targets. In the developing world, new commercial and residential real estate will need fresh approaches prioritising carbon and energy efficiency to improve resilience to climate change and contribute to a more sustainable future. Addressing the knowledge gap, upskilling the workforce and scaling technology will be critical to accelerating the pace of retrofitting, the professional services firm notes.
“Retrofitting existing buildings is the quickest and most cost-effective way to accelerate decarbonisation in the built environment,” said Guy Grainger, JLL Global head of sustainability services and ESG. “Whether it is lenders on real estate or occupiers of buildings, requirements are changing and real assets will become illiquid unless there is a plan to transition them.”
Retrofitting buildings to be more energy efficient will also require owners and occupiers to deepen relationships and form new business models to gain the significant value they both have when investing in sustainability. The alignment of stakeholders extends beyond just the landlord and tenant as suppliers, building operators, management teams, on-site teams, and even local governments must work together to transition to a low-carbon economy.
Grainger added: “Retrofitting does not need to be an all at once endeavour. But, reporting and disclosure is not enough – this requires intentional investment and a strategic approach. Retrofits are both more viable and responsible when considered in tandem with broader asset repositioning that responds to changing workplace dynamics and climate resilience.
“We have enough proof points that show we have been underestimating the return upside of intervention and underestimating the value downside of inaction.”
The Retrofitting to be Future-Fit report with expert insights on how companies and those invested in the global real estate economy can successfully decarbonise their real estate was discussed on a webinar as part of Cop27.
JLL is a professional services firm specialising in real estate and investment management. JLL is a Fortune 500 company with annual revenue of $19.4bn and operates in some 80 countries with a global workforce of more than 102,000. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
Source: smartcitiesworld.net
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