The polarization between “green” and “brown” assets is set to grow in the short-to-medium term due to a lack of available capital for refurbishment and repurposing of old real estate.
In M&G Real Estate’s mid-year Global Real Estate update report, the manager states that poorer quality assets are vulnerable to occupational market risks, such as vacancy, because of the fragile economic environment. Improving those assets to bring them closer to core or prime real estate characteristics, however, is now harder than ever.
“The ability of such assets to improve their performance is likely to be hindered through less capital being available for the required expenditure on refurbishment or redevelopment,” the report said. It’s possible that this trend could delay the investment in upgrading ESG credentials for “brown” assets — not a great outcome for making progress on the path to net-zero carbon.
“The ‘green premium’ is set to
