Retrofits: The Better Way to Decarbonise Real Estate

Meanwhile, seven in 10 CRE leaders in the Asia-Pacific say that they would be willing to pay a premium to lease a green certified building. Leasing spaces in green and sustainable buildings is becoming a non-negotiable for occupiers, and this alone should motivate landlords to consider retrofitting as well as avoiding brown discounts – where the value of a building without green credentials falls because it is unable to meet a tenant’s low-carbon targets – in the future. The acute shortage of green buildings and huge occupier demand for the same present a tremendous opportunity for early adopters of retrofitting.

The need to decarbonise buildings is clear, and so are the actions needed to achieve this goal. Maximising operational efficiencies, electrifying heat, incorporating on-site renewable energy, and sourcing off-site local renewable energy are key steps in this process. Rising energy costs and net-zero commitments are driving the energy retrofits in the built sector. The top five retrofitting priorities today, as identified by JLL research, are related to the energy-efficiency agenda.

However, retrofitting buildings for decarbonisation is a complex process, and owners must take a holistic, long-term view for it to be successful. This means considering not just the immediate operational benefits, but also the financial, environmental and social impacts of the retrofitting project.

A well-designed and executed project can deliver significant benefits to building owners, tenants and the environment, making retrofitting a wise investment in the long term. Retrofitting must also go beyond carbon to meet wider sustainability goals. Retrofits are both more viable and responsible when considered in tandem with broader asset repositioning that responds to changing workplace dynamics, health and well-being needs, social impact, biodiversity and climate resilience.