Driving intelligent investment and sustainable returns through proactive EPC management

A transformative shift in the commercial real estate industry has been gathering pace, where the fusion of smart investments and sustainability is now non-negotiable. Asset managers play a pivotal role in navigating this landscape.

New EPC regulations introduced in 2023 have significantly influenced this shift, and there are more legislative changes on the horizon.

ESG principles play a crucial role in all facets of commercial real estate investment and management, with financial success inherently linked to sustainability goals. An energy efficient property not only occupies a smaller carbon footprint, but can also tempt environmentally-conscious tenants, leading to higher occupancy rates and rents.

Assets with strong ESG credentials can also expect to attract higher market valuations, as investors target sustainable assets to meet strict sustainability targets.

Incorporating ESG into asset management strategy is therefore no longer optional, but a crucial step towards success in a market that prioritises responsible and ethical business practices.

At the core of greener commercial real estate practice, is the proactive management of Energy Performance Certificates for commercial properties. A high EPC rating is not just a sustainability checkbox; it’s often a key driver propelling asset managers toward intelligent investments and higher, long-term returns.

Consider a building with a low EPC rating which undergoes energy efficiency improvements. These improvements will not only contribute to wider environmental goals and ensure you’re complying with the government’s EPC regulations, but also result in measurable cost savings for the property owner. Possibly also higher rents, further showcasing the tangible benefits of tighter EPC management.

An essential part of EPC management is benchmarking — actively comparing the energy efficiency of buildings within a portfolio against industry standards. Dynamic benchmarking provides asset managers with actionable insights, empowering them to make informed decisions, optimise resource efficiency, and reduce both operational costs and the overall environmental footprint of their properties.

Take, for instance, a scenario where benchmarking reveals a property’s energy efficiency lags behind industry standards for that sector and specification. By identifying opportunities for improvement and then implementing those improvements, asset managers not only enhance the property’s overall sustainability but also position it more competitively within the market.

EPC management goes beyond environmental benefits and directly translates into tangible financial advantages. Implementing energy efficiency measures identified through proactive benchmarking leads to measurable cost savings. Furthermore, properties with high EPC ratings gain enhanced value and increased marketability in a market that increasingly values sustainability.

Further, properties with high EPC ratings attract higher valuations and increase marketability in a market where investors increasingly prioritise environmentally conscious assets.

Effective ESG reporting hinges on transparent communication of sustainability efforts. EPC management has become the cornerstone, providing measurable data on energy performance improvements. Reporting improvements have subsequently become crucial for asset managers seeking to demonstrate a compelling narrative to stakeholders and investors aligned with socially responsible initiatives.

Asset managers must also report on how energy efficiency measures have reduced carbon emissions and improved the use of resources. Providing investors with concrete evidence of commitment to ESG goals fosters trust amongst stakeholders, and demonstrating how improvements have directly resulted in higher returns is now paramount to retaining and winning new mandates.

Here we introduce Coyote as the ally of CRE asset managers in their journey towards more sustainable investments. Coyote’s EPC Dashboard empowers asset managers to navigate and drive the process — from initial assessments to continuous performance monitoring. The platform facilitates comprehensive benchmarking, identifies areas for improvement, and integrates seamlessly with ESG reporting requirements.

Coyote Software helps asset managers gain control over the complexities inherent in EPC management, ensuring their portfolios not only meet but surpass sustainability goals. With Coyote, the vision of intelligent investments and sustainable returns becomes tangible, propelling CRE portfolios into a future where financial success seamlessly aligns with environmental and social responsibility.

In conclusion, adopting EPC management practices isn’t passive; it’s an active and strategic move for asset managers navigating the ESG-centric landscape of commercial real estate. Asset managers using Coyote Software actively embrace this transformation, making intelligent investments that yield sustainable returns, contributing to a greener and more socially responsible future.