Longevity Partners

Energy Demand & Efficiency for Real Estate

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Energy Demand & Efficiency for Real Estate

What is Energy Demand & Efficiency for Real Estate?

Energy Demand & Efficiency should be considered the world’s “first fuel”, a hidden energy source that should be exploited before moving on to traditional energy generation.

Energy demand in real estate refers to the overall energy consumption of building users. It is crucial to understand both the users’ energy behaviours and installed technical systems to truly retrofit efficient strategies and systems in place.

By combining building energy system automation with the Internet of Things (IoT) and efficient technology, a typical building’s energy consumption can be reduced by 20 - 30%.

All building managers should ensure that their building systems operate efficiently in order to reduce costs and increase net operating income.

Why Energy Demand and Efficiency for Real Estate?

Buildings account for 40% of the world’s energy consumption and approximately 30% of global annual CO2 emissions.

Investment in energy demand systems and efficient technology, especially retrofit solutions, can have a huge impact in reducing the current built environment’s CO2 emissions.

 

With annual investments totalling around $139 billion in 2017, and forecasts indicating that this will grow to $385 billion by 2030, the financial case for building energy efficiency investments has never been stronger. The potential returns on investments are variable but it would not be unusual for a substantial retrofit on a 30 year old office asset in Europe to yield energy cost savings of 35%, which would reduce the net operating income sufficiently to yield a 12% increase in asset value.

The principal historical barriers to energy efficiency investments, the performance gap and the split incentive issue are increasingly being overcome. Venture investment in smart building technology increased 400 percent from 2005 to 2014 and the consequent deployment of millions of sensors and smart meters is providing unprecedented access to data. This is enabling investors to accurately track the savings associated with energy efficiency initiatives. Meanwhile, the split incentives problem undoubtedly remains a challenge, however the industry is addressing this through lease clauses, tenant engagement and new innovative financing solutions.

In short, real estate owners and investors who neglect energy efficiency are missing out on a lucrative investment opportunity. The value of green bonds issued primarily for energy efficiency uses nearly tripled to $47 billion in 2017. Green bonds provide a lower-cost source of financing, or refinancing, than bank loans, thereby helping to reduce the lifetime cost of capital for energy efficiency projects.

 

What are the benefits of Energy Demand and Efficiency for Real Estate?

As well as representing a profitable investment for real estate owners and investors, energy efficiency reduces the service charges budgets, increases occupancy rates and improves the environmental performance of your investments.As well as representing a profitable investment for real estate owners and investors, energy efficiency reduces the service charges budgets, increases occupancy rates and improves the environmental performance of your investments.

How can Longevity Partners help you?

Our team has a proven track record of delivering energy innovative strategies throughout Europe.

From planning and design through to delivery, our team of energy specialists are dedicated to ensuring that all stages of the process are performed with the utmost care, considering the legislative specificities and market trends of the project country.

Longevity Partners provides the following services:

  • Energy audits to identify asset-specific energy efficiency improvements, complete with forecasted energy savings based on site-specific energy modelling;
  • We identify Return on Investment (ROI) calculations for every recommended initiative;
  • Technological sourcing to scan the market and find the most appropriate low carbon solution for your needs; and
  • Fund sourcing to identify the most appropriate sources of funding and connect these funds with large-scale energy efficiency investments.

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