Kenya’s Wealthy individuals are directing their focus towards sustainability and environmental responsibility when it comes to real estate investment.
A recent survey by Knight Frank conducted among high-net-worth individuals (HNWIs) reveals that solar panels are taking precedence in property acquisitions.
Second in this trend are green and sustainable certifications, such as BREEAM, LEED, DGNB, Green Mark, and NABERS, which hold significant sway, comprising 40% of the considerations among HNWIs.
These certifications according to the report signal a commitment to environmentally friendly building practices and serve as benchmarks for sustainable development.
Energy efficiency ratings, also commanding 40% of attention, stresses the growing importance of reducing carbon footprints and optimizing operational costs in real estate investments.
Criteria that Inform Real Estate Investments
HNWIs are increasingly recognizing the long-term benefits of energy-efficient properties, both from an environmental and financial standpoint.
However, when analyzing Environmental, Social, and Governance (ESG) criteria that inform property acquisitions, a preference for renewable power sources emerges.
“Solar panels, in particular, have garnered substantial interest, with 60% of respondents highlighting them as a key criterion,” stated the Knight Frank Report 2024.
According to the report, reliance on renewable energy shows an effort to mitigate the environmental impact of real estate operations by harnessing clean and sustainable energy sources.
Reasons For Renewable Energy Reliance
The rationale behind this strategic shift is twofold.
Firstly, there is a growing environmental concern to reduce reliance on traditional energy sources and transition towards renewable alternatives.
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Solar panels, alongside wind power and hydroelectric systems, offer a tangible solution to this challenge, providing clean energy while minimizing carbon emissions.
Secondly, HNWIs are attuned to the economic benefits of investing in renewable energy infrastructure.
Despite the initial upfront costs, the long-term savings in operational expenses are substantial.
“Solar panels, for instance, offer a cost-effective alternative to traditional power sources over the lifespan of a property, making them an attractive proposition for financially savvy investors,” stated the Knight Frank report 2024.
Other ESG Considerations in Real Estate Investments
Beyond renewable energy, other ESG considerations also factor into property acquisitions.
The impact on nature and biodiversity, including the integration of green roofs and open spaces, is highlighted by 46.67% of respondents.
This report explains it as a commitment to preserving natural habitats and promoting biodiversity within urban environments.
Furthermore, the impact on the wider community is considered, with 40% of HNWIs emphasizing the importance of amenities such as community facilities and open spaces.
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Consequently, in line with the growing popularity of electric vehicles (EVs), 33.33% of respondents also prioritize the availability of EV charging points in properties.
“This forward-thinking approach acknowledges the rising demand for sustainable transportation solutions and seeks to accommodate EV owners within residential and commercial developments,” reads the report.
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