Radicalretrofit

Adaptingcitiesforaresilientfuture

Supportedby

Radicalretrofit:adaptingcitiesforaresilientfuture2

Contents

3JLLforeword

5Abouttheresearch

6Executivesummaryandkeyfindings

8Chapter1:Introduction:retrofittingforurbanresilience

10Chapter2:Buildingforresilience:whatisdrivingretrofittingprogress?

20Chapter3:Behindthebrickwall:whyretrofittingmomentumlags

23Chapter4:Racetorenewal:buildingretrofittingmomentumto2030

30Conclusion

32Acknowledgements

33References

?EconomistImpact2025

Radicalretrofit:adaptingcitiesforaresilientfuture3

?EconomistImpact2025

JLLforeword

CynthiaKantor

CEO,Project&DevelopmentServices,JLL

What’sinaskyline?Morethanabackdrop

tolife,everybuildingplaysitspartinhow

ourcitiesfunction.Fromofficeswherewe

craftideasandfactorieswheremachines

makeandmovethegoodswedependon,

tohospitalswherewecareforoneanother,

campuseswherewesharewisdom,andsportsvenueswhereweredefinewhatitmeansto

behuman—today’sbuildingsmakeourlivespossible.

Butinourrapidlygrowingcities,manyofthesebuildingsareshowingtheirage.Weknowthat

roughlyhalfofallglobalworkspacewillrequiresubstantialinvestment

soon—itcouldtakeupwardsofUS$1.2trn1incapitalexpendituretobringthoseworkplacesuptotoday’sstandards.Andthat’sjusttheofficesector.

Today’sleadersacrossgovernment,business,realestateandsustainabilitystandonthevergeofkeydecisionsovertherealestateweseetoday—

andthevisionweholdforthespacesoftomorrow.Thekeyquestionto

explore:howcanourbuiltenvironmentshapemorelivablecitieswithsafe,sustainable,andclimate-resilientinfrastructure,whilealsosupporting

businessimperatives?

Inaword,retrofitting.

Newresearchmakesapowerfulcasefor‘radicalretrofitting’acrossthe

globe.LedbyEconomistImpactandsupportedbyJLL,thisreportshowshowmomentumisgrowingfordemand-drivenretrofitting,butadoptionisfarfromwhereitneedstobe.

1JLLResearch,“OpportunitythroughObsolescence”,November18th,

/en-uk/

insights/opportunity-through-obsolescence2024

Radicalretrofit:adaptingcitiesforaresilientfuture4

?EconomistImpact2025

Demandforhigh-performancebuildingsconsistentlyoutpaces

supplyworldwide,propelledbyescalatingenergycosts,changing

buildingregulations,andeconomicforecastspointingtohigherfutureresourceprices.

StrategicretrofittingextendsassetlifespananddeliversmeasurableROI.Infact,evenmoderateretrofitscanresultinenergycostreductionsof

between30%and60%alongwithsignificantrentpremiums.Upgradedpropertiesattractprizetenantsandtalentlookingforproductive

environments,whileawardinginvestorsandlenderswithareducedriskprofile.

Buildingupgradesrepresentnotjustincrementalimprovementsbuta

transformationinhowweconceive,value,andutilizebuiltenvironmentsacrosstheglobaleconomy.Entiremarketshavethepotentialtobe

reshapedforamorecompetitiveandresilienturbanlandscape.This

reportchroniclesmomentumcitybycity,outliningpathwaystoaccelerateprogressoverthenextfiveyears.

Theskylineofthefuturecanfuelbusinessresilience,managerisk,and

createlong-termvalue.Withthecollectiveparticipationoflawmakers,

investors,developers,lenders,andtenants—andUS$600bnindrypowderwaitingforinvestmentglobally—wehaveapowerfulandhumbling

opportunitytoreimaginetheworld’scitiesandco-createabrighterfuture,forall.Turnthepageandjoinus.

Radicalretrofit:adaptingcitiesforaresilientfuture5

?EconomistImpact2025

Aboutthisresearch

Radicalretrofit:adaptingcitiesforaresilientfutureisanEconomistImpactreport,supportedbyJLL.ThisresearchispartofEconomistImpact’s

UrbanFuturesinitiative,whichaimstoempowerdecision-makerstoleadsustainableurbantransformation—tacklingtheclimatecrisis,advancingtheenergytransitionandbuildingcitiesfitforthefuture.Thereport

exploreshowbuildingretrofitsandadaptivereuseenablecitiesaround

theworldtocreateclimate-resilientinfrastructure,optimizespace,createproductive,experience-ledworkplaces,andnurturepublicsafetyand

well-being.Itexaminesthedriversandbarrierstoretrofittinginboth

leadingglobalcitiesandemergingurbancenters,accountingfordivergenteconomiccontexts.Retrofittingprogressandgapsareexaminedthroughamultistakeholderlens,withemphasisnotjustonpolicymakers,developersandserviceproviders,butalsoontenantsandowners.Assessingthegapsandexploringbestpracticecasestudiesfromglobalcities,thereport

concludesbyidentifyingpathwaystoaccelerateretrofittingprogressoverthenextfiveyears.

TheresearchisbasedonanEconomistImpactsurveyof1,000senior

executives,directorsandbusinessunitheadsacrossthebuiltenvironmentsectors,includingconstruction,realestatedevelopmentandmanagement,andengineeringanddesignin12citiesintheAmericas,Asia-Pacific,

andEurope,MiddleEastandAfrica:Berlin,Delhi,Dubai,London,LosAngeles,MexicoCity,NewYorkCity,Paris,Singapore,Sydney,TokyoandWashington,D.C.Thesurveyinsightswerecomplementedby

anexpertadvisoryandinterviewprogramwithrepresentativesfromthinktanks,industryandcitycoalitions,aswellastechnologyand

architecturecompanies.

Radicalretrofit:adaptingcitiesforaresilientfuture6

?EconomistImpact2025

Executivesummaryandkeyfindings

Citiesarevitaleconomiccenters,butrapid

urbanizationstrainsinfrastructure,resourcesandtheenvironment.Makingcitiesmore

livabledemandsmorethannewconstruction;itcallsforreimaginingtheirdesign,build

andmaintenance.Retrofitting—theupgradeandenhancementofbuildingsandbuilt

environments—iscentraltocuttingemissions,improvingenergyefficiency,nurturingpublicsafetyandwell-beingandoptimizingurbanspace.Thebenefitsincludeloweringcarbonfootprints,providingrobustpremiumsto

developersandinvestors,andcreatingbetterspacestoliveandwork.

Financialreturnstaketimetomaterialize—andoften,newlybuiltassetswillstillhavehigher

premiumsassociatedwiththem—butthe

long-termsocialandenvironmentaldividendsaresubstantial.Withboldactionandsmart

partnerships,citiesandtheirbuiltenvironmentstakeholders,suchasownersandinvestors,canbothprotectandenhanceassetvalueoverthelongterm,andbecomechampionsofurban

livability.

Keyfindings:

?Retrofittingisgainingmomentumbut

remainsfarfromscale.69%ofsurveyed

organizationsreportedashiftintheirbusinessmixtowardsretrofittinginthepastthree

years.CitiesincludingSingapore,NewYork,Washington,D.C.,Dubai,SydneyandParis

areleadinginretrofitadoption.Toalignwithclimategoals,theretrofitratemustacceleratefromtoday’s1%toaround3%annually.1Theurgencyisgreatestindevelopedcountries,

wheremostbuildingsthatexisttodaywillalsoexistin2050.Encouragingly,82%ofsurvey

respondentsexpectmoderatetosignificantgrowthinretrofittingactivityintheircitiesoverthenextfiveyears.

?Governmentactionisthestrongest

catalystforretrofitting.Mandatory

performancestandardsandpublicfinancialincentivesaresignificantlyaccelerating

retrofitsacrossbothcommercialand

residentialsectors.Anumberofcitiesare

implementing“retrofit-first”development

policies,incentivizingre-usethroughmajorplanningapplicationsrequirements.GlobalbestpracticeexampleslikeTokyo’scap-

and-tradeprogramandWashington,D.C.’sperformancemandatesshowthatregulatorypressurecandriverealemissionsreductionsandaccelerateretrofittingatscale.

?Marketforcesandinvestorsustainabilitygoalsareboostingcommercialretrofitting.Beyondcompliance,retrofittingisincreasinglydrivenbytenantdemandforsustainable,

energy-efficient,experience-ledspaces,and

Radicalretrofit:adaptingcitiesforaresilientfuture7

investors’ESGgoals.Retrofittedcommercialpropertiesdelivertangiblevaluegainssuchaslowerandmorestableoperationalcosts,enhancedtenantretention,andbettertalentattraction.

?Buildingupgradesthatimprove

insulation,accesstonaturallightand

airqualityreducehealthrisksand

boostproductivity.Increasingly,today’s

employeeswantspacesthatallowfor

adaptability,collaborationandasenseof

community.Retrofittingallowsforintentionalplacemaking,improveshealthandwell-

being,andenhancesaccessibility.Nearlyhalfofsurveyedorganizationsprioritizetenant

well-being,while43%highlightimproved

employeeexperienceasakeyretrofitbenefit.

?Financialbarriersandmisaligned

incentivesarethemostcitedobstacles

toscalingretrofits.61%ofrespondents

identifiedownerhesitancyduetohigh

upfrontcostsanduncertainreturnsasthetopbarrier,while52%pointedtoweakinvestorinterest.Althoughtheoperationalsavings

fromdeepretrofitstypicallyoutweighthe

costsoverthelongterm,thehighupfront

investmentandlongpaybackperiodslowertheperceivedviabilityofthesetypesof

retrofits.Disruptiontotenants,downtimeorlossofrentduringretrofitsalsoleavesownersfearingoccupancydrops.

?Cross-sectoralcollaborationbetween

policymakers,developers,financiers,

occupiers,andtechnologyprovidersis

criticaltoaccelerateretrofittingprogress.Thefollowingpathwaysneedtobeactivated:

—Generatingawarenessaround

retrofits.Publicandindustryawarenessinitiativesthatframeretrofitsasstrategicinvestmentsratherthantechnical

fixesareafundamentalstartingpoint.

Governments,NGOs,andtheprivatesectormustcollaboratetoreframe

retrofitsasenablersofresilience,well-beingandeconomicopportunity.

—Policyleadership,combining

mandatesandincentives.Citiesthatintegratemandatorybuildingstandards,publicsectorretrofitleadership,targetedincentives,andretrofitaccelerator

programs,suchasthoseinNewYork,Tokyo,andSingapore,arebetter

positionedtoclosetheretrofitgap.

—Impactmeasurementthatcapturesthefullvalueofretrofittingbeyondenergy.Successshouldbequantifiedacrossabroadersetofmetrics—

includingresilience,talentretention,

healthoutcomesandeconomic

vibrancy—tounlockgreaterinvestmentandpolicysupport.

—Innovative,performance-based

financingandblendedpublic-

privatepartnerships.Traditional

financingmodelsaloneareinsufficient.Mechanismslikegreenbonds,energyperformancecontractsandshared-

savingsagreements,combinedwithstrongerdisclosureandvaluationstandards,arecriticaltomobilizingprivatecapital.

—Technologyintegrationandworkforcedevelopment.ArtificialIntelligence

(AI)andsmartbuildingtechnologies

canradicallyimproveretrofitoutcomes,butscalingrequiresdataandIT

interoperability,cleanandstandardizeddata,tenantengagement,andpublic-privatecollaboration.Meanwhile,

bridgingtheretrofitskillsgapdemandsembeddingretrofit-specifictrainingintheconstructionandrealestatesectors.

Radicalretrofit:adaptingcitiesforaresilientfuture8

?EconomistImpact2025

CHAPTER1

Introduction:retrofittingforurbanresilience

Citiesareenginesofbotheconomicgrowth

andemissions.Hometo56%oftheglobal

population—ashareforecasttoapproach

70%by2050—theygenerateover80%of

globalGDP.2Buttheyalsoproduce70%of

CO?emissions,mainlyfromfossil-fuelled

transport,heavyindustryandcarbon-intensivelegacyinfrastructure.3Incities,buildingsalone

contributeupto60%oftotalurbancarbon

emissionsthroughtheirconstructionand

operation.4Whileoperationalcarboncontributesthebulkofcarbonemissionsfromthebuilt

environmentsectoratpresent,thegreater

challengeinthecomingyearsistheprojected

growthinembodiedcarbon,whichisexpectedtorisefrom25%in2021to49%in2050.5

Figure1:Tacklingtheembodiedcarbonchallenge

Projectedcarbonemissionsfromglobalnewconstructionto2050

Embodiedcarbon

100%

(emissionsassociatedwithbuildingconstructionandmaterialsthroughouta

building’slifecycle)

Operationalcarbon

(emissionsassociated

withday-to-daybuildinguse,primarilyfromenergyconsumption)

75%

50%

25%

0%

75%

25%

51%

49%

2021

2050

Source:UNEnvironmentProgramme(UNEP)andYaleCenterforEcosystems+Architecture(YaleCEA)

Radicalretrofit:adaptingcitiesforaresilientfuture9

?EconomistImpact2025

Urbanareasarenotonlycontributorsto

climatechange;theyarealsovulnerabletoitseffects.Mostbuildingsarenotresilientenoughtowithstandrisingtemperatures,flooding

orstorms.6Atthesametime,challenges

likecongestion,housingshortages,limited

spaceforcommercialdevelopmentand

inefficientbuildingdesignreducelivabilityandconstrainaccesstowell-located,high-qualityenvironments.Anurgenttransformation

isrequired.

Retrofittingreferstotheenhancement

andimprovementofbuiltassetsresulting

inenergyefficiency,loweremissionsand

greaterresilience.Retrofitscanplayavitalroleinvaluecreationforinvestorsand

buildingoccupiers,andcanalsoenhance

urbanresilience,well-beingandsocial

cohesion.Theneedisglobal,butparticularly

urgentindevelopedcountries,wheremostofthebuildingsthatwillexistin2050arealreadystanding.7Cityleadersaretakingaction.InParis,70%ofplanningapplicationsnowfocuson

refurbishingexistingstructures.8

Shiftsinhowpeopleliveandwork,especiallytheriseofhybridandremoteworking,have

acceleratedthedemandforflexible,high-

performingspacesthatseamlesslyincorporateproductivity-enhancingtechnology.AsTheresaBackus,director,BuildingInnovationHub

observes,“Ifpeoplehavetobeintheoffice

more,theywantthespacetobebetter.Peoplewantspacesthatsuittheirneeds.”

Byoptimizingurbanspaceandtransforming

existingbuildings,retrofittingreducesurban

sprawlandsupportsmoreefficientcityplanningbycreatingspacesthatpeopleneedandwant.Almosthalf(45%)ofEconomistImpactsurveyrespondentssaidretrofittingwasmoreeffectivethannewconstructioninmeetingurban

spatialneeds.

Retrofitscandriveeconomicgrowth.C40Cities,theglobalmayoralinitiative,9estimatesthat

sustainableconstruction,includingretrofitting,couldcreatemillionsofjobsgloballyaswellasfinancialsavingsfromenergyefficiencyand

reducedwaste.10

Radicalretrofit:adaptingcitiesforaresilientfuture10

?EconomistImpact2025

CHAPTER2

Buildingforresilience:whatisdrivingretrofittingprogress?

Urbanareasoperatewithindiverseeconomiccontexts,whichshapetheirprioritiesand

challenges.This,inturn,influencestheneedforandurgencyofmakingbuiltassetsresilienttofuturechallengesthroughretrofits.Citieswhoseurbancoresareincreasinglybuiltout,suchasParis,Washington,D.C.,areseeinggrassroots

resistancetonewgrowthinbuiltenvironments.CitingtheexampleofParis,ThomasVonier,

architectandseniorpartneratChesapeake

Strategies,notedthatthemigrationoflight

industryoutofthecitytoperipheralareasandbeyondhascreatedopportunitiesforadaptivereuseoferstwhileindustrialbuildingsfor

corporateofficeuse.

Ontheotherhand,citieslikeDelhiandMexicoCity,whichcontinuetoexperienceahigh

degreeofurbanizationandinboundmigration,needmoreofbothnewconstructionand

upgradestoexistingbuildings.While16%of

businessesinDelhiand23%inMexicoCitysaw

theirshareofnewconstructionriseinthelastthreeyears,thesurveyfoundthecorrespondingshareformaturecitieslikeBerlin,LosAngelesandSydneyis0%,3%and4%,respectively.

Whatdothenumberssay?Thebusinesslandscapeforretrofits

EconomistImpact,ssurveyshowsthat

retrofittingisemergingasapromisingarea

forbusinesses:almost69%ofrespondents

notedthattheirorganization’sbusinessmixbetweenretrofittingandnewconstruction

hadshiftedtowardsretrofittinginthelast

threeyears.Almost10%saidretrofitting

constitutesmorethan60%oftheirorganizations,business.Morethanhalf(55%)derivebetween31%and60%oftheirbusinessfromretrofitting.Berlin,Singapore,NewYorkCity,Washington,

D.C.,Dubai,SydneyandParisleadthetrendofgrowingretrofittingdemand(seefigure2fortheleadingcities).

Figure2:Surveyedmarketswithstrongestretrofittingmomentum

Aggregateshareofrespondentswhosaidthattheirbusinessmixbetweenretrofittingandnewconstructionhadsignificantlyandmoderatelyshiftedtowardsretrofitting.

81%

Singapore

81%

Berlin

●

三l

77%

NewYork

i

75%

Washington,

D.C.

Source:EconomistImpactconstructionandrealestatesurvey2025

Radicalretrofit:adaptingcitiesforaresilientfuture11

?EconomistImpact2025

Classificationoftheextentofretrofittinginterventions

TheEconomistImpactsurveyusedthefollowingfour-typeclassificationofretrofitsasdefinedinJLL’sresearch,Opportunitythroughobsolescence,basedontheextentofchangesinvolved:light,moderate,deepaswellasconversions.11

?Lightretrofitsinvolveminimallyinvasivemeasuresthatfocusonminorupgradestoasingleaspectorfeatureofthebuilding.Thesemayincludesmartthermostatinstallation,improvedinsulation,orLEDupgrades.

?Moderateretrofitsaresubstantialinterventionstomultiplebuildingsystems.Thesemayincludeheating,ventilation,andairconditioning(HVAC)upgrades,windowreplacements,andlightingoverhauls.

?Deepretrofitsentailextensive,transformativeworkthatsignificantlychangesabuilding’s

structure,systemsorfunction.Thesemayincluderenewableenergyintegration,upgradestothebuilding’senvelope(itswallsandroof),andupgradingelectricalinfrastructure.

?Conversionrepurposesbuildingsentirelysotheyperformadifferentfunction,suchasconvertingageingbuildingsandabandonedfactoriesintoresidentiallofts.Adaptivereuseistypicallyappliedtobuildingsofarchitecturalorhistoricalsignificance,andisaformofconversionthatpreserveskeyheritagefeatureswhileenablingnewuses.

Moderateretrofitsrepresentthebulkof

interventionactivityacrossbuildingassettypes,especiallyofficeandpublicsectorbuildings,butasset-specificvariationsemergefromthesurvey(seefigure3).Forexample,althoughdeepretrofitsrepresent,onaverage,aquarterofaggregate

retrofittingdemandacrossassetclasses,industrial

andlogisticsbuildingsseeafarhighershare

(almost40%),comparedtoresidentialbuildings(just15%),withthehighcapitalexpenditure

requirementsfortheseretrofitsloweringappetiteamongthelatterassetclass.Residentialbuildingsseethehighestshareoflightretrofitsinthesurvey(48%),comparedtocommercialassets.

Figure3:Moderateretrofitscommonlyundertakenrelativetootherinterventions

Extentofretrofitsacrossbuiltassetcategories

LightretrofitModerateretrofitDeepretrofitConversion50%

40%

Shareofrespondents

30%

20%

10%

0%

Officebuildings

Hotelsorequivalent

Residentialbuildings

Mixed-usebuildings

Publicsectorbuildings

RetailspacesIndustrialandlogistics

Builtassetcategory

Source:EconomistImpactconstructionandrealestatesurvey2025

Radicalretrofit:adaptingcitiesforaresilientfuture12

Lightandmoderateretrofitscanproduce

energysavingsof10to15%incommercialbuildingsandupto30%inresidentialones.Deepretrofitscanachievetransformationalenergysavingsof40to60%incommercialand60to90%inresidentialbuildings.12

Conversionisalsocrucialtooptimizingspaceincities.Upgradingexistingbuildingsto

meetmodernneedsandadapttochangingpopulationscanpreserveacity’shistoryandheritagewhilemeetingdemandforhousing,commercialneedsorpublicservices,

particularlyinpost-industrialareaswherethelandscapeofworkmayhavechangedsignificantly.

Policyinterventionsdriveenergyandnetzeroretrofitsacrossthecommercialandhousingsectors

Policiesandregulationsthatencourageor

mandatebuildingupgradesarethemostpowerfulleverinacceleratingretrofits(seefigure4).63%

ofrespondentswereawareoftheexistenceofaformalretrofittingpolicy,eitherstandaloneoraspartofabroaderstrategy(suchasnetzero,urbansustainabilityorspaceoptimization),while56%notedpublicfinancialincentivessuchasgrants,loansorsubsidies.“Policyactionandcoordinationatalllevels—local,nationalandglobal—isneededtoaccelerateretrofittingprogress,”saysIrene

Skoula,directorofenergyandbuildingsatC40.

Figure4:Policysupportmechanismsplayasubstantialroleindrivingretrofittingprogress

Shareofrespondentsawareoftheexistenceofvarioussupportmechanismsintheircityofoperations

Aformalisedlocalgovernmentretrofittingpolicy,eitherstandaloneoraspartofabroaderstrategy(egnetzero,urbansustainability,spaceoptimization)

63%

Governmentinitiativesofferingloans,grants,taxcredits,subsidiesortechnicalassistancetoincentivizeretrofitting

48%

Tenant-focusedretrofittingguidelinesissuedbythelocalgovernment,eitherstand-aloneoraspartofbroaderbuildingregulations

48%

Atleastonepublic-privatecollaborationinitiativetosupportretrofitting

48%

Programstoupskilltheworkforceorprovidetechnicalassistanceforretrofitting(egacceleratorprogrammes)

44%

Policiesorprogramsenablingdemandaggregationforretrofittingmaterialsandtechnologies

44%

Transparentgovernmentreportingonretrofittingprogressaccessibletothepublic

38%

Source:EconomistImpactconstructionandrealestatesurvey2025

Radicalretrofit:adaptingcitiesforaresilientfuture13

Comparedtovoluntarypoliciesandprograms,mandatoryperformancestandardsand

regulationstargetingtheworst-performing

buildingsarevital.Forinstance,Tokyo’sCap-and-TradeProgramcameintoeffectinApril

2010,requiringlargecommercialandindustrialbuildingstoreducetheirtotalCO2emissions.Facilityownerswhofailedtomeetreduction

targetswererequiredtooffset1.3timesthe

shortfall,fineduptoUS$3,44013andhadtheirviolationspubliclydisclosed.14Todate,over

90%oftargetfacilitieshaveexceededtheir

reductiontargetsandafterfouryears,the

TokyoMetropolitanGovernmentreporteda

23%reductioninemissionscomparedtobase-yearlevelsundertheprogram.15

Whenaskedwhichfactorswillaccelerate

retrofittingoverthenextfiveyears,respondentspointedsquarelyatpolicy;55%chosestricter

codes,and52%backedmoregenerous

incentives.“Thecountriesthathavegenerally

implementedpolicyrelatedtoretrofittingare

muchfurtheraheadintermsofhowtheydealwithbuildingstockthatisageingout,”saysScottDunn,Asia-PacificchairofUrbanLandInstitute(ULI),arealestateandlanduseexpertnetwork,andvice-presidentofAECOM.Governments

areincreasingtheseefforts.InSingapore,newrulesissuedbytheBuildingandConstructionAuthorityrequirethebottom25%ofbuildingsperformanassessmentandimplementenergy-savingsmeasurestoavoidpenalties.16InJapan,thegovernmentfundsathirdofthecostsfor

retrofittingofficebuildings,providingupto

US$0.32m17forprojectsthatreduceabuilding’senergyconsumptionby20%ormore.18

Driversofcommercialretrofitting

Whilecommercialretrofitstomeetregulatorymandatesarecompliance-driven,theyare

alsoaresponsetorisingmarketdemandforenergy-efficient,low-carbonandresilient

spacesfromdevelopersandtenants,and

investorsustainabilitygoals.19Poorbuildingperformancecomeswithrisingenergybills,regulatorypenaltiesandtheriskofstrandedassets.20

Energy-efficientbuildingsalsocommand

premiumsinrentsandsalepricesforowners.2155%ofsurveyrespondentscitedassetvalueasakeybenefitofretrofitting.Theso-called“greenpremium”contrastswitha“browndiscount”

inwhichinefficientbuildingslosevalueandbecomehardertolet.22

“Increasingly,tenantsdemandsustainable

spaces.Insomemarkets,wehaveseentenantsrequirerenewableenergyprovisionsatmarketcostasabasicconditionforrentalagreements,”saysTedHowland,vicepresidentofgroup

sustainabilityatCapitaLandInvestment.

“Manytenantslookforcertificationsasan

indicatorofabuilding’ssustainabilityfeatures.”CertificationssuchasLEED(Leadership

inEnergyandEnvironmentalDesign),

BREEAM(BuildingResearchEstablishment

EnvironmentalAssessmentMethod),FitwelandWELLBuildingStandard23arenowessential

formarketingtop-tierproperties.24Nearly

60%ofrespondentsalsocitedlowerutility

andmaintenancecostsasthetopbenefitfortenantsdependingontheleaserequirementstopaythesecosts.

Commercialretrofitsarealsoincreasingly

drivenbytheneedofassetinvestorstomeetESGreportingrequirements.“Manybigassetownersareactivelyworkingtodecarbonize

theirportfoliosinordertomeetscience-basedtargetsandalignwithESGframeworkslike

CRREM(CarbonRiskRealEstateMonitor),”

Radicalretrofit:adaptingcitiesforaresilientfuture14

saysBecciTaylor,directorofRetrofitatScaleatArup.Motivatedtomitigaterisk,“thisinvestor-ledpushoftenmovesfasterthanpublicpolicy,”shenotes.