There has been a 30 percent increase in the amount of annual capital expenditure required to meet decarbonisation targets across Europe.

AEW estimates investment in retrofits — based on the EU’s Carbon Risk Real Estate Monitor (CRREM) standards — to equate to 19 basis points per square metre of prime capital value. This works out at an average of €14 per square metre across all real estate sectors.

AEW, which monitors 196 prime European markets for its research, also says shopping centres and logistics properties will need annual spending requirements of €18 and €17 per square metre, respectively, while residential will need the lowest capex at €10 per square metre. The increase, from 15 basis points of annual required investment in AEW’s September 2023 report, has been driven by three factors. Firstly, current energy intensity of European buildings is 31 percent behind schedule compared to the Paris Agreement targets as incorporated in the CRREM pathwa