Sustainability and Value Capital Markets: Central London Offices

Our new report, Sustainability and Value – Capital Markets: Central London Offices, analyses the link between sustainable buildings and pricing in the Central London office investment market. In the report, we focus on the two predominant forms of environmental certification for buildings in the UK – Building Research Establishment Environmental Assessment Method (BREEAM) and Energy Performance Certificate (EPC).

Our research demonstrates that the market is increasingly attaching higher prices to more sustainable assets, in anticipation of higher returns and lower risks. The data also shows that this investment is resulting in improvements being made to the environmental performance of London’s office stock.

The research examines 592 ‘pure’ office investment deals that took place in Central London between January 2017 and December 2021. Development, refurbishment and portfolio deals were excluded. Deals were matched for age, size and location, and both BREEAM and EPC status. A ‘hedonic pricing’ model was used to isolate the impact of environmental certification.

Our results show that the Central London office investment market is showing a positive link between sustainability and higher prices, with both BREEAM and EPC certification producing a clear premium for most measures.

If you want to find out more about what this means for both investors and occupiers, fill out the form below to download the report.

JLL’s research team are delighted to have been awarded the 2023 AREF research prize for our outstanding paper Sustainability & Value, Capital Markets - Central London. Watch an interview with the chair of the judging panel below, and access the full report here. For any questions please reach out to the team - Cameron Ramsey and Elaine Rossall.