In light of new research suggesting that solar panels increase the value of commercial property, this week Simon Morris explains the future of renewabletechnologies in the property sector.
The Evolving Nature of the Commercial Property Market
Because Simon Morris is an independent property consultant, who acts in an advisory capacity to help UK property investment funds maximise profit potential on their property portfolios, he understands the evolving nature of the commercial property market.
As new technologies and innovations reshape the properties we live in, work in etc., the requirements of a desirable – thus lucrative – commercial property change. That is why Simon has found it so fascinating that a new study has suggested that solar panels increase the value of commercial property. It indicates the trajectory of the market going forward.
Shedding Light on PV
According to Energy Live News, a new report called ‘Shedding Light on PV,’ has suggested that this value rise is due to the increased revenue streams that become available upon the installation of solar panels on commercial buildings.
The report cites a particular example – Sainsbury’s use of a warehouse until 2030 with an “extensive” PV systems on its roof. The deal apparently went “above the asking price” to ensure it was done at approximately £107 million. This was a net yield of 4.75%. Using limited data, the report uses other examples to illustrate its point.
Adding Value by Improving a Property’s Marketability
Director in valuation at solar supplier JLL (a company who contributed to the report), Chris Strathon, commented on its findings. Strathon said that “we believe rooftop solar on commercial property adds value by improving the marketability of a property to occupiers who are driven by cost or CSR objectives and additional income which is received via power purchase agreements and government-backed tariffs.”
Solarcentury (who released the report) CEO Frans van der Heuvel added that “a new wave of leading brands are going solar – Sainsbury’s, Google, Mars, IKEA and Apple among them – and this is undoubtedly stimulating the market.”
A More Prominent Role in the Commercial Property Sector
In Simon’s opinion, they both make valid points, and the findings of this report seem obvious. Renewable technologies are not only more cost effective than ever, but popular with a public who are coming to value energy efficiency in the fight against global warming.
Therefore, it seems highly likely that renewable technologies will come to have a more prominent role than ever in the commercial property sector, in the months and years to come.