Capital Markets Ponder Net-Zero Assets

The commercial real estate industry and capital markets must work together to transition Canada's building stock to low-carbon, climate-resilient assets that provide both safe havens for occupants and returns for investors. A discussion paper from JLL Canada looks at some of the key issues, challenges, and communication gaps around valuation, financing, and finding the right metrics to steer new approaches. Buildings account for 40% of global greenhouse gas (GHG) emissions, but, within cities, the built environment accounts for a higher proportion still, and in major hubs such as London and Tokyo, real estate can account for more than 70% of urban emissions. The paper examines how the commercial real estate industry values the built environment, with appraisal and financing processes providing a strong behavioural lever if practitioners learn to integrate the real impact of the zero-carbon and ESG components, and investors are prepared to accept conclusions that may be ahead of market trends.