Landlords and Tenants remain biggest energy efficiency challenge for European real estate investors

European real estate institutional asset managers relationship with tenants is often complex and multi-faceted. When asked about the greatest challenge they face with tenants when it comes to driving improvements in the building’s energy consumption, 72% of respondents cited getting tenant buy-in for these changes, followed by getting tenants to change their behaviours to help reduce energy use (58%). A third (33%) cited coordinating upgrades in multi-tenant buildings, with the same number saying the greatest challenge is keeping business disruption to a minimum for occupiers. Just 6% of respondents said updating leases to ensure tenants are using the building efficiently is the greatest challenge they face when it comes to improving the energy consumption of a building.

Almost three-quarters (72%) of respondents say that business disruption to their tenants or occupiers is such a significant barrier that it has become a reason not to proceed with building upgrades and improvements. In comparison, around one in 10 (11%) say it is only very slight or not a problem at all.

European real estate institutional asset managers also face financial barriers to improving the energy efficiency of their buildings with respondents citing access to capital as top, followed by the high initial costs and significant capital needed to modernise systems like HVAC, lighting and building management systems. Rising construction costs was ranked third, followed by the long return on investment which often conflict with immediate business needs. 

Katie Whipp, Chief Business Officer at re:sustain, said: “Our new research reveals the extent of the challenges faced by real estate managers across Europe when faced with managing tenants in buildings that require major improvements or retrofits, particularly to improve their energy consumption. The risk of this disruption damaging tenant businesses and relationships is so high that many are choosing to instead simply bury their head in the sand.

“But this can be avoided. At re:sustain we’ve developed new innovative technology which uses collected building management system data to create a highly calibrated digital twin of each building - an accurate model that reflects real asset performance. This remote approach allows for targeted optimisations and detailed mechanical insights on existing systems, reducing energy use, carbon emissions, and operational costs in support of sustainability goals—all without requiring capex from asset owners or importantly, without business interruption for occupiers.”

To date, buildings using re:sustain technology have enjoyed 37% average annual energy savings in a process that takes just four to six weeks to implement.

For further information, visit https://resustain.com/