11/03/2022 | by
Article Author(s)

The REIT industry is likely to see additional gains in GRESB performance in the years ahead, given that a number of listed REITs appeared in the benchmark for the first time this past year, says Dan Winters, senior director at GRESB.

Speaking on the REIT Report, Winters noted that in general, GRESB scores start to ramp up in year two and year three, “so I'm really expecting some additional increases in the REIT score in the years ahead.”

Winters also discussed how a flight to quality real estate assets is likely to characterize the next several years, with companies needing to offer a superior investment and occupant experience to maintain competitiveness.

Winters said that achieving those aims requires “a solid ESG program that's continuing to advance.” He added that the biggest threat to ESG is inertia, but that in the current economic climate the real estate industry is more likely to accelerate ESG-oriented efforts than pull back.

“Superior ESG performance means you’re implementing business best practices. And at the end of the day, successful business is all about maximizing inputs and minimizing waste. The leaders on ESG can attract capital at favorable rates. They offer strong products for leasing to their tenants. And the laggards, well, they're going to watch their competitiveness erode and that's a huge risk at a company level,” Winters said.

Winters noted that 372 listed property companies around the world that participated in the 2022 GRESB real estate benchmark, a level which is up 45% from 2020 and nearly double from 2017.