The Everywhere Vehicle?

The Everywhere Vehicle?

Electric Vehicles (EVs) have had quite a lot of press recently. There could be greater moves to incentivise ownership, such as loans, amongst the backdrop of debates over car manufacturers and the Zero Emission mandate–including the closure of a Stellantis factory in Luton. The Labour Party manifesto pledges to reinstate the 2030 phase-out of internal combustion engine sales, albeit the sale of hybrid vehicles may be allowed until 2035.

Regardless, EV adoption is on the rise. Over the last five years, UK private EV ownership has grown more than tenfold, with more than 1.6 million EVs now on UK roads, including 766,000 privately owned. Yet, making up just 2.5% of private vehicles, there is ample room for growth.

The greatest limitations for wider adoption remain cost, limited infrastructure, range concerns, and long charging times. Rapid and ultra-rapid direct current chargers (or DC chargers), needed for long-distance journeys, account for only 17% of the UK's 62,500 public chargers. A recent development could help ease this with solar paint, yet for property owners, it is important to understand strategic charging provisions which could create income opportunities.

High-traffic zones, like motorways and trunk roads, are prime locations for rapid charging. Among the busiest 1% of locations on UK roads (for cars and taxis), 60% lack DC chargers within five minutes, and 10% have none within 10 minutes. Additionally, 30% of the 572 road networks analysed have no DC chargers within 500 meters (see map from Mike Denicolai below) . By targeting these gaps, property owners can ease range anxiety, tap into a growing market, and support net zero goals.

A strategic, blended approach to charger infrastructure is essential to future-proof assets. Rapid and ultra-rapid chargers suit high-traffic zones like motorways and retail parks, while slower AC chargers are better suited to residential areas. Our analysis identifies local authorities with high growth potential based on several key metrics.

As David Goatman, Global Head of Energy, Sustainability and Natural Resources, highlights, there are five factors to consider: the increasing variety of charge point operators (CPOs), high but variable rents, grid connectivity requirements, EV adoption trends, and ability to meet ESG commitments. Seeking the right advice will maximise the opportunities available.

See the full report for details.

Building at COP

Global emissions need to fall by a staggering 42% to avoid the worst impacts of climate change. After 33 hours of extended negotiations, COP29 concluded with several major agreements. Chief among them is a commitment from developed nations to pay $300 billion annually to developing countries by 2035, a trebling of what the EU, US, UK, Japan and other nations have been paying since 2022. This funding will likely support climate adaptation measures, enhance real estate and infrastructure resilience, as well as accelerate the transition to renewable energies.

Another milestone was the introduction of a UN-overseen carbon credit trading market. Bloomberg notes concerns that "the rules set a low bar for countries and may facilitate the trading of credits that have little environmental value." Yet, this could pave the way for more formality and adoption. Could we see the voluntary become compulsory? This would have wide-reaching impacts for real estate owners who want to ensure their net zero transitions are in place, and for those looking to derive income from producing carbon credits.

More on real estate, the Buildings Breakthrough coalition–a group of 64 countries formed to collaborate on reaching “near-zero emission and resilient buildings by 2030”–provided an update on its 2024 Priority Actions. Picking on two of the notable priorities:

1. Global definitions for net zero buildings: A unified global standard, similar to the UK’s Net Zero Carbon Buildings Standard (NZCBS), is under development to streamline the myriad of certifications and metrics across geographies.

2. Building capacity and skills: Governments are urged to identify gaps and pinpoint actions to "tailor existing tools and support, addressing capacity-building gaps and fulfilling competency, skills and curriculum needs”. This aims to overcome a significant barrier to sustainable construction: the lack of trained professionals.

CRE sentiment improves and sustainability in focus

Corporate real estate overall sentiment is at its highest this year and the third highest level (although still negative) since we started recording in 2022. That’s the results of the Q3 2024 Knight Frank Corporate Real Estate Sentiment Index, a simple 12-question online survey to take the pulse of market sentiment. Whilst still negative overall, one area in relation to sustainable portfolios hits positive territory. Some 42% of all respondents ‘strongly agreed’ or ‘agreed’ with the statement relating to sustainable buildings (increasing number of certified buildings over the next 6 months), the second highest it has been since we began recording.

Regulatory and disclosure requirements continue to drive the move toward sustainable real estate, and this is likely to continue. “Sustainability reporting has become part of business as usual for almost all of the world’s largest 250 companies, and a large majority of the top 100 companies in each country, territory or jurisdiction,” according to the latest KPMG Survey of Sustainability Reporting. Interestingly, all the top 100 companies in the US report on sustainability.

As always, the practical challenge will be sourcing appropriately certified products within global markets, but the intention is clear from global occupiers.

Nine of the top 10 markets – Nicola Ryan’s stat of the month

As the year wraps up, we should take stock of what the year has bought. The momentum towards green building certifications continues to grow. Nine of the top 10 markets for BREEAM certification saw year-on-year growth across offices, retail, and industrial sectors, totalling over 4,500 certifications in 2024.

What else I am reading

Nearly 70% of commercial properties in Australia could see a NABERS rating fall as the system reflects higher renewable generation, the first signatories to the Sustainable City Charter launched by Westminster City Council and Westminster Property Association have cut their average energy use per square metre by 19%. GPE to reuse 60% of material by 2024 and the Ingka Group, IKEA’s owner, has announced a $1.5 billion investment to phase out fossil fuels in its operations by 2030.