The Strait of Hormuz: Conflict and the impact of the UK construction material supply chain
Learn moreInstitutional Investments
Property development finance firms ESG focus is attracting institutional investment
12/12/23
5 min
Property finance
News
The increased focus on sustainability by property development finance firms is driving growing interest among institutional investors as they bid to meet their own ESG targets, according to new research from our “Building Yields and Homes” report.
Nearly two out of five (39%) of institutional investors questioned by Downing strongly agreed that the ESG focus of property development finance firms is helping to encourage more investment by institutions. Another 60% slightly agree, the research found.
Property development finance firms’ recognition of the importance of ESG is creating a virtuous circle – around 43% of institutional investors questioned strongly agree that lending to the sector is helping institutional investors to meet their ESG standards while another 56% slightly agree.
The study with UK institutional investors responsible for around £405.6 billion assets under management found nearly one in four (24%) expect a dramatic increase in the exposure of institutions to property development finance over the next five years. Another 65% expect a slight increase.
Downing’s research found institutions are potentially willing to give up yield on property backed credit investment as long as projects have very strong ESG credentials, the research among private sector and public sector pension funds, family offices and insurance asset managers, found.
Nearly nine out of 10 (89%) questioned say they would be willing to forego some yield on a project. Nearly half (48%) believe institutions would be willing to forego between 25 and 50 bps in yield for a project with very strong ESG credentials.
Around 9% estimated institutions would only be willing to lose up to 10bps, while 35% estimated they would be willing to give up between 10 and 25bps. Another 8% estimated they would go as high as 50 to 100bps.
Parik Chandra, Partner and Head of Specialist Lending, Downing LLP said: “Property development finance firms are increasing their focus on sustainability at exactly the right time to attract institutional investment.
“There is a widespread recognition that property development supports institutions with their sustainability targets and there is a growing appetite from institutions to invest in the sector particularly in projects with very strong ESG credentials.”
Download the report below or find out more about Downing's Property Finance team
Share
Contents
See full contents
The increased focus on sustainability by property development finance firms is driving growing interest among institutional investors as they bid to meet their own ESG targets, according to new research from our “Building Yields and Homes” report.
Nearly two out of five (39%) of institutional investors questioned by Downing strongly agreed that the ESG focus of property development finance firms is helping to encourage more investment by institutions. Another 60% slightly agree, the research found.
Property development finance firms’ recognition of the importance of ESG is creating a virtuous circle – around 43% of institutional investors questioned strongly agree that lending to the sector is helping institutional investors to meet their ESG standards while another 56% slightly agree.
The study with UK institutional investors responsible for around £405.6 billion assets under management found nearly one in four (24%) expect a dramatic increase in the exposure of institutions to property development finance over the next five years. Another 65% expect a slight increase.
Downing’s research found institutions are potentially willing to give up yield on property backed credit investment as long as projects have very strong ESG credentials, the research among private sector and public sector pension funds, family offices and insurance asset managers, found.
Nearly nine out of 10 (89%) questioned say they would be willing to forego some yield on a project. Nearly half (48%) believe institutions would be willing to forego between 25 and 50 bps in yield for a project with very strong ESG credentials.
Around 9% estimated institutions would only be willing to lose up to 10bps, while 35% estimated they would be willing to give up between 10 and 25bps. Another 8% estimated they would go as high as 50 to 100bps.
Parik Chandra, Partner and Head of Specialist Lending, Downing LLP said: “Property development finance firms are increasing their focus on sustainability at exactly the right time to attract institutional investment.
“There is a widespread recognition that property development supports institutions with their sustainability targets and there is a growing appetite from institutions to invest in the sector particularly in projects with very strong ESG credentials.”
Download the report below or find out more about Downing's Property Finance team
Share
The increased focus on sustainability by property development finance firms is driving growing interest among institutional investors as they bid to meet their own ESG targets, according to new research from our “Building Yields and Homes” report.
Nearly two out of five (39%) of institutional investors questioned by Downing strongly agreed that the ESG focus of property development finance firms is helping to encourage more investment by institutions. Another 60% slightly agree, the research found.
Property development finance firms’ recognition of the importance of ESG is creating a virtuous circle – around 43% of institutional investors questioned strongly agree that lending to the sector is helping institutional investors to meet their ESG standards while another 56% slightly agree.
The study with UK institutional investors responsible for around £405.6 billion assets under management found nearly one in four (24%) expect a dramatic increase in the exposure of institutions to property development finance over the next five years. Another 65% expect a slight increase.
Downing’s research found institutions are potentially willing to give up yield on property backed credit investment as long as projects have very strong ESG credentials, the research among private sector and public sector pension funds, family offices and insurance asset managers, found.
Nearly nine out of 10 (89%) questioned say they would be willing to forego some yield on a project. Nearly half (48%) believe institutions would be willing to forego between 25 and 50 bps in yield for a project with very strong ESG credentials.
Around 9% estimated institutions would only be willing to lose up to 10bps, while 35% estimated they would be willing to give up between 10 and 25bps. Another 8% estimated they would go as high as 50 to 100bps.
Parik Chandra, Partner and Head of Specialist Lending, Downing LLP said: “Property development finance firms are increasing their focus on sustainability at exactly the right time to attract institutional investment.
“There is a widespread recognition that property development supports institutions with their sustainability targets and there is a growing appetite from institutions to invest in the sector particularly in projects with very strong ESG credentials.”
Download the report below or find out more about Downing's Property Finance team
Share
The increased focus on sustainability by property development finance firms is driving growing interest among institutional investors as they bid to meet their own ESG targets, according to new research from our “Building Yields and Homes” report.
Nearly two out of five (39%) of institutional investors questioned by Downing strongly agreed that the ESG focus of property development finance firms is helping to encourage more investment by institutions. Another 60% slightly agree, the research found.
Property development finance firms’ recognition of the importance of ESG is creating a virtuous circle – around 43% of institutional investors questioned strongly agree that lending to the sector is helping institutional investors to meet their ESG standards while another 56% slightly agree.
The study with UK institutional investors responsible for around £405.6 billion assets under management found nearly one in four (24%) expect a dramatic increase in the exposure of institutions to property development finance over the next five years. Another 65% expect a slight increase.
Downing’s research found institutions are potentially willing to give up yield on property backed credit investment as long as projects have very strong ESG credentials, the research among private sector and public sector pension funds, family offices and insurance asset managers, found.
Nearly nine out of 10 (89%) questioned say they would be willing to forego some yield on a project. Nearly half (48%) believe institutions would be willing to forego between 25 and 50 bps in yield for a project with very strong ESG credentials.
Around 9% estimated institutions would only be willing to lose up to 10bps, while 35% estimated they would be willing to give up between 10 and 25bps. Another 8% estimated they would go as high as 50 to 100bps.
Parik Chandra, Partner and Head of Specialist Lending, Downing LLP said: “Property development finance firms are increasing their focus on sustainability at exactly the right time to attract institutional investment.
“There is a widespread recognition that property development supports institutions with their sustainability targets and there is a growing appetite from institutions to invest in the sector particularly in projects with very strong ESG credentials.”
Download the report below or find out more about Downing's Property Finance team
Please fill out the form to download the full report
Share
Sign up to stay up to date with the latest insights and investment opportunities
Learn more
Related Insights
View all2024 has laid the foundations for the UK housing market in 2025
26/11/2024
5 min
read
Property finance
2024 has laid the foundations for the UK housing market in 2025
26/11/2024
5 min
read
Property finance
Macroeconomic concerns drive institutional investors to specialist property development finance firms, Downing research shows
1/2/2024
5 min
read
Property finance
Macroeconomic concerns drive institutional investors to specialist property development finance firms, Downing research shows
1/2/2024
5 min
read
Property finance
Downing LLP does not provide advice or make personal recommendations and investors are strongly urged to seek independent advice before investing. Investments offered on this website carry a higher risk than many other types of investment and prospective investors should be aware that capital is at risk and the value of their investment may go down as well as up. Any investment should only be made on the basis of the relevant product literature and your attention is drawn to the risk, fees and taxation factors contained therein. Tax treatment depends on individual circumstances of each investor and may be subject to change in the future. Past performance is not a reliable indicator of future performance. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 545025). Registered in England No. OC341575. Registered Office: Downing, 10 Lower Thames Street, London, EC3R 6AF.
VAT Number: 112 940 149