Transition risk: What property owners need to know

Transition risk refers to the financial risks property owners face as the world transitions to a low-carbon economy. With new regulations and changing market demands, property owners must adapt or risk losing value on their assets. Here’s a breakdown of what transition risk means and why it matters for the real estate sector.

What is Transition Risk?

• Regulatory changes: Governments are implementing stricter policies on emissions and energy efficiency. Properties that don’t comply may face fines or higher operating costs.
  • Example: The Government of Netherlands banning office buildings with an EPC label of D, or worse. Read more.
• Market shifts: Tenants and investors increasingly prefer sustainable buildings. Properties that aren’t environmentally friendly may struggle to attract tenants or maintain value.
  • Example: Tenants are willing to pay more per square meter for energy efficient areas. Read more.
• Technological advancements: Innovations like green energy systems and energy-efficient building materials are becoming the norm. Falling behind on these trends could make your property less competitive.
  • Example: The “EU Solar Energy Strategy” making solar panels mandatory for buildings over 250m2. Read more.

Why does transition risk matter for real estate?

• Increased costs: New laws require expensive retrofitting or upgrades to bring buildings up to modern energy standards.
• Stranded assets: Properties that don’t adapt to new regulations and market demands will lose value, become harder to lease, or be sold at a loss.
• Rising demand for green buildings: Tenants and buyers are increasingly favoring sustainable properties, which means that outdated, non-compliant buildings could be at a disadvantage.

How Telescope Can Help

At Telescope, our platform is designed to help commercial property owners manage these risks with ease. Here’s how we add value:

• Get started easily: Upload your portfolio, and we gather the relevant information from public available sources you need to get started.
• Make risk management part of day-to-day activities: Risk assessments are made for asset-level operations and able to use strategically across portfolio.
• Find ideal projects across portfolio: Our platform identifies which buildings in your portfolio face transition risks based on their energy performance, helping you prioritize actions.
• Negotiate with tenants about the best projects: Use our profitability analysis to analyze and showcase how you’ll conduct the best projects for your portfolio, for the tenant and the planet.

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By managing transition risks proactively with Telescope, you can not only avoid financial losses but also enhance the value and sustainability of your properties. Stay ahead of the curve and secure your assets for the future.

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Book a demo to see how we a give you a way out of the taxonomy maze

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