Environmentally friendly commercial property can make more money

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How green policies raise income is the AA Real Estate Company in America. After making the energy efficiency of their commercial buildings a priority, the firm calculates it has saved $24.5m in energy costs since 2000.

Landlords of commercial properties that have energy saving improvements report that tenants are more satisfied and more likely to stay. Buildings that cost less to heat and light are attractive to tenants who may be prepared to pay premium rents. As long as they save in energy bills by more than the extra rent, they are happy, and the landlord earns more.

Some lenders are prepared to offer cheaper commercial mortgages for energy efficient buildings. Research in America found that owners of energy efficient buildings are less likely to default on their mortgage loans. European banks are exploring the idea of “green tagging” loans for projects that are environmentally friendly. The performance of these loans can then be accurately tracked. If research finds that loans for green projects are low risk, interest rates could be reduced for green project loans.

Though many commercial property owners have green policies because they want to reduce the effects that carbon emissions have on the environment, they can also benefit from increased income.

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