Industry body warns on property sector’s failure to cut emissions
Property groups across Europe risk major writedowns unless they take urgent steps to reduce carbon emissions from buildings they own, according to an industry research group.
European property owners, investors and valuers have failed to account for the cost of transitioning to net zero, the Urban Land Institute said, resulting in a widespread overvaluation of offices, shops and residential property, which it describes as a “carbon bubble”.
“If transition risk costs are not factored in now by owners, then the industry could face a major crisis,” said the ULI, which has a membership of 46,000 people working in real estate and urban development.
The institute said that the current flawed approach to decarbonisation in the real estate industry “could lead to our investment markets polarising and an increased risk of stranding assets in parts of our cities that require more investment, not less”.
“We think that by introducing the guidelines, we can prevent a real shock from happening. If regulations come in, there will be a shock because a large part of the market needs to be adjusted in a very short amount of time,” said Lisette van Doorn, chief executive of ULI Europe.
“If we don’t act on real estate valuations, our industry’s significant contribution to climate change will continue,” she added.
This story originally appeared on: Financial Times - Author:George Hammond
