Summer Readings: 3 articles for the summer

The readings cover some of the most important topics in CRE such as EU-legislation, Sustainability and Climate risk - all linked to financial impact.

1) Pricing or panicking? Commercial real estate markets and climate change - 2025

Resume: "Climate change is affecting how investors assess and ultimately price commercial real estate (CRE) in the euro area. Using data from 2007–2023, new research finds that buildings exposed to physical climate risks—like floods and heat stress—are penalized in market prices, and that this discount is rising. Yet, overall this repricing does not seem to have harmed market liquidity, indicating an orderly adaption to climate change. However, for older buildings transition risks seem to materialise via falling liquidity in addition to falling prices, suggesting that vulnerable properties may already be in danger of becoming “stranded assets”. These findings have important implications for financial stability and green transition policy. While markets appear to be adapting, policymakers must guard against sudden, disruptive corrections". - (abstract)

Authors: Kai Foerster, Ellen Ryan & Benedikt Scheid.

Soure: https://www.suerf.org

Link to article -> Pricing or panicking? Commercial real estate markets and climate change

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2) Sustainability increasingly pivotal in European real estate lending, with unsustainable assets poised for devaluation - 2025

Resume: According to CBRE, half of European real estate lenders now enforce asset‑level sustainability thresholds before approving loans, with nearly 45% requiring business plans for underperforming properties and around 42 % offering more favorable terms to sustainable assets. The findings suggests that loan pricing is being adjusted via margin discounts for compliant assets and higher margins for non‑compliant ones, creating a lending market split based on ESG credentials. As a result, assets lacking sustainability credentials risk devaluation or becoming “stranded” as lenders and appraisers increasingly penalize poor environmental performance.

Authors: Dragana Marina

Soure: CBRE.dk

Link to article -> Sustainability increasingly pivotal in European real estate lending, with unsustainable assets poised for devaluation

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3) EU-taksonomien i ejendomsbranchen: ”Gennemsigtigheden er én af taksonomiens helt store fordele” - 2023

Resume: The article highlights that the EU Taxonomy establishes clear, objective criteria for what counts as environmentally sustainable, and emphasizes that transparency is one of its greatest strengths in the real estate sector. By being transparent in sustainability performance, investments, and alignment, it enables investors and companies to communicate credibility and avoid greenwashing. As a result, actors indirectly involved in the value chain such as construction and property firms will increasingly need to prepare to meet taxonomy requirements to access green financing and maintain competitiveness.

Authors: Marika Englén & Anna-Mette Monnelly

Soure: DS.dk

Link to article -> EU-taksonomien i ejendomsbranchen: ”Gennemsigtigheden er én af taksonomiens helt store fordele”

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