With reports showing that Britain’s inflation rate has climbed to the highest it has been in 40 years, the UK faces an increasing risk of falling into a recession. As a consequence, landlords and property managers of industrial and commercial buildings face mounting pressure to keep their properties appealing on the market. The ugly truth is that while the sector might have overcome the disruption COVID-19 caused, it is now spiralling energy prices that’s clouding the sector’s bright new dawn.
With a potential recession on the horizon, real estate investors are facing a super competitive future as they struggle to make their properties more appealing in a quiet market. How can property owners ensure that their portfolios remain attractive? A huge, untapped opportunity is through unlocking their properties’ energy flexibility, significantly reducing its usage and subsequent cost.
Although unknown to most property owners, there’s a technology that allows commercial and industrial buildings to identify their non-essential electricity usage, aggregate it, and ‘sell’ it to the National Grid at volume, ultimately creating a whole new source of revenue. It’s called demand side response (DSR), and it’s being increasingly adopted by a host of forward-thinking offices, hotels and industrial facilities across the UK, enabling them to untap vital energy flexibility whilst improving their properties’ BREEAM ratings and subsequent value.
Not all electricity is equal or required constantly for performance, and this principle might well be what separates winners from losers in a potential real estate slowdown in the upcoming months. Whilst many assume that electricity consumption will contribute to a sluggish property market, pioneering businesses such as Pintent Masons – the first organisation in the UK legal sector to adopt this climate technology solution – are using DSR programmes to reduce their baseline energy consumption by 28%.
A recession might – and might not – happen, but one thing’s for certain – soaring energy prices won’t give property investors a rest for the rest of 2022, and buildings that have energy flexibility will become much more attractive than those that have no control over their electricity usage.