Adding value to your property has a lot to do with forecasting or anticipating market trends: When you go to sell this property in the future, what will prospective buyers be looking for? After all, improving and adding value to your property is always done with the goal of maintaining your investment, building equity and increasing the likelihood that you can sell your property for more than you originally paid for it.
One of the lenses through which you might see the future value of your property is via the lens of Environmental, Social and Governance, or ESG. This is a way of looking at real estate and the built environment generally that prioritises the way public spaces impact society in a wider sense. The focus includes an embrace of green technology in buildings, steps to use energy or other resources in a way that shrinks environmental footprints. But ESG goes beyond climate to consider affordable housing and the ways in which businesses in your space affect the community too. Ideas about the circular economy, multi-tenant spaces and social justice also play a role.
There are several ways to think about making concrete investments in the ESG aspects of your commercial space.
When designing new spaces, there are many choices for making sure a building uses energy efficiently. For older buildings, retrofitting spaces to use more ecological ways of heating or cooling is an option. Whether you've invested in new construction or an older space, you can be assured that future tenants and buyers alike will be asking about energy use, so this is a good area for investment.
Solar panels are one obvious upgrade here, as are green roof spaces. Water filtration systems and sinks that shut off automatically are also wise amenities in which to invest — and are good selling points for future tenants.
What can you do to ensure your space is contributing to the greater good of the entire community? This might be anything from ensuring the diversity and overall positive contributions of your tenants to keeping up with public health practices. You might also be thinking about accessibility: Is your space accessible to differently-abled people? Is it possible to make it more accessible? In general, what can you do to add to the community rather than being only extractive?
Thinking about these questions can help you realise ways to improve your ESG quotient.
Many of the social and environmental aspects of your space might be tied up in local rules, regulations and developments. The extent to which your building is accessible via public transportation, for example, is tied into governance. So perhaps there is work to be done lobbying for better governance. Issues of trash pickup, sewage, clean water access and health protocols are also going to be closely intertwined with governance. So don't hesitate to get involved in the governance side of your building; it can truly pay off in better ESG scores that make your space attractive — and more valuable.
If you want to think more deeply about how you can invest in the ESG of your commercial real estate — or to factor in this way of thinking when you are looking for your next property — do reach out to our team. The professionals at Ray White Surfers Paradise are always interested in helping you maximise your investment.