The European commercial real estate sector faces a stranded asset “time bomb”, according to a survey of asset managers undertaken by ESG data intelligence company Deepki.
The company surveyed more than 250 senior European commercial real estate asset managers from institutions in the UK, Germany, France, Spain and Italy, with a combined AUM of €226.3bn. More than half claimed that 30% or more of their assets were ‘stranded’ due to poor energy performance. Half said a further 20% to 40% of their real estate portfolios were at risk of becoming stranded in the next three years.
The sectors facing the greatest risk of stranded assets are retail, followed by industrial, offices, healthcare and residential.
Some 59% of survey respondents agreed it was ‘quite a high priority’ to focus on reducing, mitigating or limited the financial risks of these buildings and 15% said it was a ‘high priority’.
Vincent Bryant, CEO and co-founder of Deepki, said: “The European commercial real estate sector faces a stranded asset time bomb due to much stricter energy regulations and commitments to hit fast-approaching net zero targets. The lack of a clear net zero trajectory – or commitment to implement one – acts not only as a barrier to accessing capital, but also impacts property valuation.
“Our research shows that many asset owners and institutional investors do have a strategy in place to address the problem, but success is dependent on auditable and reliable data, KPIs and reporting.”
