Irish Investing and Sustainability

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Irish investment has been very fruitful the past few years, despite the fact that the Covid-19 pandemic has had a negative effect on business. The economy has done well considering other changes in the market as well. Investors have been very motivated to accumulate properties that contain sustainable characteristics. During the market crisis that occurred during 2008, the sustainability going down affected the main agenda for many parties. Currently, purchasers and occupiers are rating sustainability as one of the most important aspects in the market, despite recent economic instability.

Sustainability has also helped formed a part of the wider ESG agenda, which has become increasing critical for professional organizations. The ESG agenda has to do with Environmental, Social, and Corporate Governance statutes, which are very important. Properties that were built years earlier are more challenging to retrofit, because of this result there is a focus on buildings built in the last 5 to 10 years.

The Republic of Ireland compares very favorably to other international companies too. As a result of very high standards, the constantly evolving Irish building regulations has led newly developed Irish properties to an optimal place to be a perfect fit. These things are what investors look for in their sustainable and impact investing agenda.

Considering investors, new build properties are assisting in the rebalance of portfolios that in many cases have a majority of older stocks. These properties can include offices, residential, or other asset classes. Material sustainability issues are going to become more relevant in the future in terms of capital value and liquidity.

If a property is being bought today that is designed, delivers, operated, and monitored to the highest standards then there is confidence that if a person ever goes to sell the property or get it valued, it will present well. The property should perform exponentially better than a property that doesn’t have sustainable characteristics as a part of its intrinsic nature. The sustainable characteristics of a development are an important part of the investors underwriting and due diligence assessment. If a property has these lists of characteristics it is more likely to attract parties who are focused on these factors.

Sustainability and ESG are no longer a six-monthly chat in organizations, but are now weekly and in many cases daily topics. Sustainable performance and financial performance are becoming intertwined. In recent years, several Irish developers have taken ownership of sustainability. This new outlook is looking very good for investors in the near future.

Written by John Spurrier, Mortgage Analyst for Online Application