Best-in-class building. But is it an uncomfortable investment?
The Ink Building at Timber Square is arguably one of the most sustainable office buildings in the UK. Landsec’s new Southbank development ticks every box.
- Hybrid steel and cross-laminated timber structure, significantly reducing embodied carbon
- Fully electric. No fossil fuels in operation
- BREEAM Outstanding. EPC A. NABERS 5-star
- 191,000 sq ft of best-in-class, future-proofed office space
And it’s BP’s new global HQ.
The same BP that recently cut renewable investment and refocused on oil and gas.
Which creates an interesting tension.
The asset is sustainable. The tenant isn’t , or at least, that’s the question.
For years, sustainability in real estate has focused almost entirely on the asset: energy efficiency, electrification, embodied carbon, certifications. Those things matter. But they’re only part of the picture.
If a portfolio is full of highly rated buildings leased to companies increasing their carbon exposure,is it a sustainable portfolio? Or a green wrapper around a brown core?
Perhaps we should be asking a different question: how sustainable is the tenant’s business model, and what does that mean for the long-term security of the income? And how will capital markets price that risk, through tenant demand, lease terms, income quality, valuation yields?
Two things can be true at the same time. Sustainable buildings are better assets. And tenant transition risk is becoming just as important as EPC ratings.
This is a genuinely fascinating and complex case study. We’d love to hear your views, Get in touch.
