APAC investors strengthen green resolve amidst uncertainty

Global headlines about major banks exiting climate alliances and outflow from sustainable funds might raise concerns about the future of the sustainability agenda. Yet, the sustainability momentum in APAC remains resilient. JLL's APAC Investor Sustainability Survey 2025 reveals that beneath the surface, sustainability is fundamentally reshaping investment criteria in the region’s commercial real estate sector despite current headwinds.

Half of the investors surveyed cite economic uncertainty as their primary concern for capital deployment over the next two years. However, climate change and regulations will rise dramatically in their priorities over the five-year horizon. Already, nine in ten investors factor sustainability into their investment decisions, with 63% reporting direct impacts on bid values. This commitment establishes sustainability as the new normal for value creation.

Investors that focus on return on investment (ROI) are prioritising measurable performance over surface-level credentials. Energy efficiency and renewable energy have overtaken green certifications as the top non-negotiable features for investments. This shift reflects a move towards concrete metrics that directly impact building emissions, reduce operating costs, and improve returns.

Figure 1: Non-negotiable building features for investments in the next three years

 Source: APAC Investor Sustainability Survey 2025 (JLL Research, 2025)

Building performance is increasingly key, with 60% of investors validating sustainability initiatives through energy efficiency metrics. Moreover, two in five will only invest in buildings with performance data available within the next three years.

Investors are enhancing and future-proofing their existing assets through targeted sustainable retrofits. Medium-intensity interventions have emerged as the preferred strategy for mitigating various types of obsolescence risk. These asset enhancement initiatives prioritise operational efficiency and resilience. Looking ahead, two-thirds of investors plan to implement smart building technology retrofits – including energy analytics and AI optimisation – within the next five years. Half are also planning renewable energy installations and efficiency retrofits to decarbonise their buildings.

Figure 2: Preferred strategies to mitigate obsolescence concerns

Source: APAC Investor Sustainability Survey 2025 (JLL Research, 2025)

This performance-first approach aligns with APAC's shifting regulatory landscape towards increasingly stringent energy efficiency requirements. For instance, Singapore's new Mandatory Energy Improvement (MEI) regime requires owners of energy-intensive buildings to conduct audits and implement efficiency improvements or face penalties. Targeted retrofits provide a pathway to meet tightening, performance-driven regulations while simultaneously unlocking measurable value in existing assets by cutting operational costs. As regulations tighten and climate risks grow, sustainable retrofits represent more than environmental gestures – they are essential safeguards against obsolescence risks and key drivers of asset value in an evolving market.

Global sentiment on sustainability may shift due to economic and regulatory uncertainties. Yet, APAC’s real estate investors continue to embed sustainability into their decision-making processes. Enhancing building performance and future-proofing existing assets through strategic retrofits have become critical to meeting market demand and retaining long-term value.