Sustainability is no longer an “extra” in commercial property valuation. It’s becoming core.
For many years, those of us working at the intersection of commercial property investment and sustainability have been frustrated at the pace and the extent to which regulated valuations have incorporated sustainability. However, the latest RICS professional standards on sustainability in commercial valuation (effective from April 2026) are taking a meaningful and constructive step forward.
At its core, the guidance requires valuers to consider sustainability factors where they are significant, measurable and relevant to market behaviour and value.
But it also highlights a tension. Valuation reflects market value today, while sustainability risk is often about future resilience. Many sustainability risks are real but not yet priced, creating a growing gap between asset value and asset risk. In other words, potential mis-pricing of risk and value.
RICS points to several ways sustainability now influences value:
- Capital and operational costs of retrofit and compliance
- Income impacts (rent, voids, incentives, growth)
- Physical and transition risks (climate, regulation, obsolescence)
- Market perception, tenant demand and liquidity
- Comparable evidence and investor behaviour
The standard reinforces that sustainability is not just an “extra” – it must be grounded in data, comparables and professional judgement. Where sustainability factors are material, they should be reflected explicitly or implicitly in valuations.
The question is no longer whether sustainability affects value, but how fast markets begin to price it in.
Want to discuss what this means for your assets? Get in touch.
