A structured methodology for planning commercial real estate portfolio decarbonization

Wednesday, 15 March, 2023
Reading Time : 2 minutes

The real estate industry is facing increasingly complex and difficult challenges to address climate change and occupier’s evolving needs. Asset owners and managers must modernize and decarbonize their building portfolios to have a viable future – achieving their own targets as well as attracting green investors.

Decarbonisation at scale could be an overwhelming task. WSP, in partnership with Schneider Electric and Brookfield Asset Management, have developed a new methodology for corporate real estate (CRE) teams to analyse and prioritise brownfield modernisation projects across complete asset portfolios. The aim being to maximise return on investment and appeal to occupants, while minimising disruption.

This methodology presented as a whitepaper, and apply the process to a variety of European property assets within the Brookfield BPREP-E fund, a core-plus, medium-term hold portfolio comprising a mix of multi-family, hotel, logistical warehouse, office and student housing assets.

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“Collaboration between asset owners, the construction profession and the supply chain is critical if we are to meet net zero commitments. The imperative is to modernize the existing building stock whilst minimizing the whole life carbon of our assets.”

David Leversha
Director, Global and UK Net Zero lead for WSP Property & Buildings

Key takeaways from the whitepaper:

Through establishing targets, gathering the right data and analysis, this process helps to identify which assets are the easiest to decarbonize that will maximise return on investment, while minimizing disruption.
Assets within portfolios are categorized into different archetypes that have similar characteristics. This helps to calculate the cost-per-ton of carbon that would be saved to inform which interventions and archetypes should be prioritized.
The process looks at three intervention scenarios for these assets, defining how much work is needed to decarbonize these assets and the levels of disruption involved in modernizing them.
This is an ongoing, iterative process that needs all stakeholders, including asset managers, tenants and supply chains be invested in the process.
This methodology can be applied to large existing building portfolios of all types.

“Our methodology focuses on capturing and analyzing the right data to identify which assets have the most decarbonization potential, the types of interventions that will have the maximum benefit, and a roadmap to follow.”