IPD EcoPAS Q3 results
13th November 2013
Jess Stevens, Associate and Head of Sustainability, IPD
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Agenda
Introduction
EcoPAS Universe and Sample Size
EcoPAS Q3 Results
IPD’s Global Sustainability Strategy and Environmental Research Paper
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Many thanks to our sponsors...
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Introduction
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Introduction
IPD EcoPAS Q3 Results
• Risk vs. Performance Differential
• Value in ‘state of the nation’ / descriptive information
• Industry looking for differential performance between green and brown, but in order for IPD to
say anything meaningful about this relationship with investment performance, we need:
large sample of data on the same properties over a substantial period of time;
 Good quality data on whole portfolios (minimal unknown data)
• EcoPAS is an investment tool and therefore has huge potential to show the link between
sustainable asset features and investment performance
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EcoPAS Universe and Sample Size
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EcoPAS Universe and Sample Size
IPD EcoPAS Q3 Results
IPD Quarterly Database: Proportion of funds in EcoPAS
Based on capital values, as at Q3 2013
IPD Quarterly Database: Proportion of funds in EcoPAS
Based on capital values, as at Q3 2013
Funds in
EcoPAS,
£51.1bn
Funds not
in EcoPAS,
£60.3bn
Based on total number of Funds in EcoPAS
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Funds in
EcoPAS,
£46.3bn
Funds not
in EcoPAS,
£65.1bn
Based on total number of Funds who submitted data on
time to be included in EcoPAS Benchmark
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EcoPAS Universe and Sample Size
IPD EcoPAS Q3 Results
EcoPAS Q3 2013
(submitted)
Proportion of UK
Quarterly
Database Q3
2013
2,530
No. of Funds
Capital Values
Property Count
EcoPAS Q3 2013
(subscribed)
Proportion of UK
Quarterly
Database Q3
2013
Proportion of UK
Quarterly
Database Q3
2012
27%
2,854
31%
21%
51
22%
63
27%
14%
£46.3bn
42%
£51.1bn
46%
30%
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EcoPAS Universe and Sample Size
IPD EcoPAS Q3 Results
Comparison between the EcoPAS Universe and the UK Quarterly Database, by Capital Value
Standard Retail
Shopping Centres
Retail Warehouses
Standard Offices
Office Parks
Industrial
Other
EcoPAS Universe
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UK Quarterly Database
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EcoPAS Universe and Sample Size
IPD EcoPAS Q3 Results
Comparison between the EcoPAS Universe and the UK Quarterly Database, using Equivalent Yield
as a proxy for quality
6.6%
6.6%
5.4%
7.9%
5.9%
Standard Retail
Shopping Centres
8.3%
Retail Warehouses
8.9%
7.4%
Standard Offices
7.3%
9.6%
Office Parks
Industrial
Other
6.7%
6.5%
7.0%
6.4%
EcoPAS Universe
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UK Quarterly Database
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EcoPAS Q3 Results
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Unknown and Missing EcoPAS data by ERV for EPC data and
CV for all other environmental categories, 2012 and 2013
IPD EcoPAS Q3 Results
2012
2013
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BREEAM
EPC Rating
Flood Risk
Rating
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Accessibility
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Water
Waste
Flexibility
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Unknown and Missing EcoPAS data by ERV for EPC data and CV for
all other environmental categories for Funds that participated in
EcoPAS in 2012 and 2013
IPD EcoPAS Q3 Results
2012
2013
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BREEAM
EPC Rating
Flood Risk
Rating
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Accessibility
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Water
Waste
Felxibility
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EPC Analysis: Breakdown by ERV, 2012 and 2013
IPD EcoPAS Q3 Results
2012
35%
2013
• 5,550 units with an EPC
rating (43.2% total units)
32.5%
30.0%
30%
29.7%
29.3%
• 834 units with an F&G rating
(6.5% total units)
25%
18.9%
20%
•7300 units with an Unknown
rating (57% total units)
18.3%
15%
10.7%
10%
8.2%
9.2%
5%
0%
3.6%
0.3%
4.8%
3.9%
• ERV of £1.1bn with an F and
G EPC rating (13% of total ERV)
0.5%
A
B
C
D
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E
F
G
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EPC Analysis: F&G EPCs, breakdown by ERV and Market Segment
IPD EcoPAS Q3 Results
Std Retail
30%
Shopping Centres
Retail Warehouses
Std. Offices
26.9%
25%
20.4%
20%
16.9%
15%
9.6%
10%
5%
5.2%
9.1%
6.1%
0%
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Office Parks
Industrial
Other
Retail
• 464 units with an F&G EPC rating (19.0%
total units)
• ERV of £63.8mn in F&G EPC rated units
(17.7% of total ERV)
Office
• 207 units with an F&G EPC rating (11.1%
total units)
• ERV of £31.8mn in F&G EPC rated units
(9.2% of total ERV)
Industrial
• 132 units with an F&G EPC rating (13.2%
total units)
• ERV of £11.0mn in F&G EPC rated units
(9.1% of total ERV)
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EPC Analysis: Year of certification, by EPC count
IPD EcoPAS Q3 Results
2013 (187)
2012 (431)
2011 (429)
2010 (652)
2009 (1887)
2008 (1687)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
A
B
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C
D
E
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F
G
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Flood Risk: Breakdown by Capital Value
IPD EcoPAS Q3 Results
Significant
Moderate
Low
Nil
Unknown
59.1%
60%
• 301 properties with significant
and moderate flood risk ratings
(11.9% total)
50%
40%
• 369 properties with unknown
flood risk ratings (1.3% total)
30%
17.6%
20%
10.8%
10%
5.8%
6.6%
Significant
Moderate
• Capital Value of £5.8bn with
significant and moderate flood
risk ratings (12.5% of total CV)
0%
Low
Nil
Unknown
-10%
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Flood Risk: Breakdown significant & moderate flood risk by CV
and market segment
IPD EcoPAS Q3 Results
Std. Retail
Shopping Centres
Retail Warehouses
Std. Offices
30%
25%
18.6%
18.2%
15%
10%
5%
Industrial
Other
Retail
• 188 properties with significant &
moderate flood risk (16.4% total)
• CV of £4.4bn with significant & moderate
flood risk (17.6% of total CV)
26.2%
20%
Office Parks
12.4%
9.0%
7.0%
Office
• 44 properties with significant &
moderate flood risk (6.8% total)
• CV of £576.1mn with significant &
moderate flood risk (4.2% of total CV)
2.9%
0%
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Industrial
• 44 properties with significant &
moderate flood risk (11.4% total)
• CV of £543.8mn with significant &
moderate flood risk (12.4% of total CV)
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Water efficient practices: Breakdown of ‘No’ water efficient
practices by CV and market segment
IPD EcoPAS Q3 Results
Std. Retail
Shopping Centres
Retail Warehouses
Std. Offices
Office Parks
Industrial
Other
30%
• 29% properties with water efficient
practices
• 13.8% properties without water
efficient practices
• 57.2% properties with unknown data
24.7%
25%
21.8%
20%
18.4%
15%
12.0%
10%
13.2%
8.1%
Retail
• CV of £3.8bn without water efficient
practices (15.0% of total)
Office
• CV of £1.2bn without water efficient
practices (8.5% of total)
5%
1.3%
0%
Industrial
• CV of £1.1bn without water efficient
practices (24.7% of total)
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Waste Recycling: Breakdown of ‘No’ water recycling practices by
CV and market segment
IPD EcoPAS Q3 Results
Std. Retail
Shopping Centres
Retail Warehouses
Std. Offices
Office Parks
Industrial
Other
14%
12%
12.1%
10.8%
10%
7.6%
8%
Retail
• CV of £1.7bn without waste recycling
(6.7% of total)
6.2%
6%
5.3%
4%
2.9%
Office
• CV of £421.2mn without waste
recycling (3.1% of total)
2%
0%
• 42.0% properties with waste
recycling
• 6.1% properties without waste
recycling
• 52.0% properties with unknown data
0.0%
Industrial
• CV of £472.9mn without waste
recycling (10.8% of total)
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Flexibility: Breakdown of ‘No’ Flexibility by CV and market
segment
IPD EcoPAS Q3 Results
Std. Retail
Shopping Centres
Retail Warehouses
Std. Offices
Office Parks
Industrial
Other
70%
60.1%
60%
58.9%
50%
45.9%
39.2%
40%
Retail
• CV of £9.5bn with no flexibility (37.3% of
total)
30%
20%
• 24.6% properties with flexibility
• 33.3% properties with no flexibility
• 42.1% properties with unknown data
23.6%
19.8%
16.7%
10%
0%
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Office
• CV of £2.6bn without flexibility (19.2%
of total)
Industrial
• CV of £42.6bn without flexibility (58.9%
of total)
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Accessibility: Breakdown of properties >8 minutes from a wellused public transport node by CV and market segment
IPD EcoPAS Q3 Results
Std. Retail
Shopping Centres
Retail Warehouses
Std. Offices
80%
60.6%
60%
49.3%
50%
40%
35.9%
30.9%
30%
20%
10%
19.8%
8.1%
Industrial
Other
• 48.3% properties <8min from a well used
public transport node
• 22.3% properties >8min from a well used
public transport node
• 29.4% properties with unknown data
69.2%
70%
Office Parks
Retail
• CV of £6.0bn >8 minutes from a well
used public transport node (32.9% of total)
Office
• CV of £1.2bn >8 minutes from a well
used public transport node (13.6% of total)
0%
Industrial
• CV of £2.5bn >8 minutes from a well
used public transport node (69.2% of total)
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IPD Quarterly Property Index for 12 months to Q3 2013 vs. IPD
EcoPAS Universe for 12 months to Q3 2012
IPD EcoPAS Q3 Results
IPD Quarterly Property Index for 12
months to Q3 2013
EcoPAS Universe for 12 months to Q3
2013
Total Return
6.7%
Total Return
7.5%
Income Return
6.0%
Income Return
5.9%
Capital Growth
0.7%
Capital Growth
1.5%
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EPC
Flood
Currently
developing
methodology to
aggregate data to
property level
Early indications of
differential
performance
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IPD EcoPAS Universe for 12 months to Q3 2012: Flood Risk
IPD EcoPAS Q3 Results
EcoPAS Universe for 12 months to Q3 2013
Total return 7.5%
Std. Retail
Shopping centres
Flood risk
8.8
No flood risk 8.8
Flood risk
-0.8
No flood risk 6.4
Retail
Warehouses
Flood risk
4.2
No flood risk 5.0
Std. Offices
Office Parks
Industrial
Other
Flood risk
7.7
No flood risk 8.8
Flood risk
17.5
No flood risk 5.0
Flood risk
8.3
No flood risk 7.5
Flood risk
7.8
No flood risk 8.9
* Where ‘Flood Risk’ includes Significant, Moderate and Low flood risk rating
*Where ‘No flood risk’ includes Nil flood risk ratings
*Excludes Unknown Data
NB: Please treat these figures with caution, given the small sample size in some of the segments above.
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IPD’s Global Sustainability Strategy and Environmental Research Paper
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IPD Global Sustainability Strategy
IPD EcoPAS Q3 Results
Incorporate Sustainability
into core real estate analysis
• Collect sustainability data on every asset in
IPD’s global database;
• Ensure that sustainability is not just an ‘addon’ / ‘nice to have’;
• Measure sustainability alongside all other
drivers of performance (risk and return)
Conduit of standardisation
•Improve investors’ understanding of how
sustainability relates to investment concerns;
•Avoid becoming another certification or
rating tool;
• Ensure that we are aligned with global
reporting standards
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IPD – Lorenz/Lüetzkendorf Environmental Research Paper
IPD EcoPAS Q3 Results
IPD have recently undertaken a global environmental research paper with Prof. David Lorenz and
Prof. Thomas Lüetzkendorf from the Karlsruhe Institute of Technology in Germany, with support
from Paul McNamara.
•
Primary objectives
– Understand what EcoPAS might look like in a variety of different markets (the concept of
EcoPAS has global relevance, so how do these principles transfer across markets?);
– Identify whether there are common variables across multiple markets around which a
global EcoPAS service might be built;
•
Timeframe
This paper will be released toward the end of Q1 2014
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Closing remarks
IPD EcoPAS Q3 Results
•
EcoPAS coverage from 2012 to 2013 has grown significantly
•
There is value in descriptive information;
•
EcoPAS is an investment tool which highlights the risk exposure
within whole real estate portfolios – the link between sustainable
asset features and investment performance should be an
outcome of this and not the primary focus;
•
It is likely that the return differential between ‘green’ and ‘nongreen’ is further down the line, once the industry fully
understands the intrinsic risks of investing in non-sustainable
assets
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Jess Stevens
Associate and Head of Sustainability
jessica.stevens@ipd.com
+44.20.7336.9664
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