It’s a rather bleak assessment from former central banker, Mark Carney- those “stranded” real estate assets that will not keep apace with the regulatory transition to Net Zero. And as the FT reports, he doesn’t hold back: “There will be people…who either implicitly or explicitly think that these timelines are going to shift, or that somehow or another it is not going to become a binding constraint. But that is a big risk to take.”

This follows industry calls, reported in EGI news, for clarity on EPC rules. As Flora Harley, head of ESG research at Knight Frank, says: “We just need certainty. It’s the one thing investors and asset owners really want and need to make these sometimes-big investments. If we get that clarity, there will be more impetus to act and we can move faster.” Clearly, Carney thinks there is no time wait for that certainty. 

Yet there is reason for industry optimism. The FT article and this EGI article both cite AEW’s recent research report on climate-related risk in the European real estate sector - predicting that the costs of hitting Paris Agreement targets will be almost 30% higher than its 2023 thinking and that the current energy intensity of European buildings is 31% behind Paris 2050 targets. But with predicted annual returns, as Hans Vrensen, head of research and strategy for Europe at AEW, says: “…even if investors need to catch up and meet more challenging decarbonisation capex targets going forward, they remain achievable.” Many will no doubt hope so.