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Greener Yields from REITs

Published on 11 Nov 2021

Key Highlights

  • REITs are favoured by investors as they offer attributes from both fixed income and equities, while providing exposure to real assets.
  • In line with the rise of interest in environmental, social and governance (ESG) factors the concept of “double materiality” is making its way into the world of REITs, where the effects of environmental and social issues on the REIT’s activities and bottom line, as well as the effect of the REIT’s activities on the environment and society are considered.
  • In a 2021 JLL survey of over 550 occupiers and real estate investors in the Asia Pacific, over 70% of corporate occupiers are willing to pay a rental premium to lease certified green buildings as part of efforts to meet their decarbonisation goals.
  • Between 2020 to 2030, Cushman and Wakefield projects demand for an additional 1.35 billion square feet of office space across the Asia Pacific region.
  • The iEdge-UOB APAC Yield Focus Green REIT index uses GRESB Assessment data to deliver improved risk-adjusted performance by rewarding REITs with a higher weight based on the environmental performance of the REITs.
  • GRESB is a mission driven and investor led organization providing standardized and validated ESG data to the capital markets through an annual self-reported assessment that is scored by GRESB.
  • The material environmental performance aspects of the REITs are measured using four indicators; Energy Consumption, Water Consumption, Greenhouse Gas (GHG) Emissions and Green Building Certifications
  • The index provides comparable financial performance to a broader APAC REITs index while providing improved environmental performance.
  • The index methodology will be periodically updated to incorporate advancements in the GRESB assessment methodologies as well as improvements to data quality and granularity, with the objective of selecting the highest quality REITs with improved environmental performance.

To find out more about the index methodology and how it contributes to your investment portfolio, click here to download the index methodology whitepaper.