If the built environment sector is to get to grips with stranding exposure, what would you say are the priority actions?
MH: What we’re seeing is specialist investors and operators in the market that are investing in assets to undertake retrofit. I think there is a skills related problem. It’s about upscaling those companies and having the financial framework and investment model to facilitate green retrofitting. If you’re a company with a portfolio of property, your asset managers are used to traditional or convention refurbishments. It doesn’t necessarily mean they are best placed to undertake a green retrofit. There are huge issues, not just around competencies and skills for asset managers and letting agents, but also around how to collaborate and how to structure joint venture arrangements for the financial delivery of retrofitting solutions. It’s also about how government can incentivise the 75% of companies or individuals in the industry who may not either have the appetite, financial capacity, or skills and knowledge to change.
KMS: We’re always looking at western world practices, but a huge amount of the solution is elsewhere in the world. We need to capitalise on that as much as possible. We need to seek to understand relative and emerging skills – there’s a big skills gap. We’re also not yet in a position where we have everything in place in the supply chain to adapt properties at the moment, so that is also a challenge.
We need to develop better and more integrated data sets. For example, in the UK, you could unite energy performance certificates with national valuation data sets. Once you connect these data sets, you have a value against properties with an EPC rating and you have an opportunity to recognise the interrelationships between efficiency and value. You need property reference numbers to link data sets together, and you need consistent baselines and codes of information to measure the performance of the property. Unfortunately, these data sets lack comparative consistency which makes connecting the data sets difficult in any meaningful way. A guideline relating to consistency and transferability in built environment data produced by government would be very useful. This could be repeated around large parts of the world, as lots of countries collect property tax information and are starting to record building performance data.
PG: This problem exists because the systems are built from the bottom up. You’ve got two different groups of people looking at the same individual property units for different purposes. You can’t even get the addresses and the units that make up an occupied building to match up. It should be within the gift of government and powerful computing to overcome this.
MH: Data harmonisation is essential. There has to be greater integration of energy performance data and data about financial performance from the commercial real estate sectors. There’s a complete disconnect between energy performance and financial performance. As part of the CRREM  project we looked at getting key data providers together, but issues around commercial interests and sensitivity are preventing data sharing. A lot of real estate investors will be providing data to companies such as GRESB who monitor and analyse their energy performance, and to MSCI who look at financial performance and investment characteristics for the same properties and assets. I think the whole debate would be shifted if you could showcase the associated financial benefits of improved energy performance.