“The chronic shortage of housing in the UK represents both a risk and an opportunity for our market,” says Simon Scott, Head of Living Capital Markets at JLL. “The lack of affordable housing in key urban locations is undoubtedly a drag on productivity and growth, limiting the availability of talent and the agglomeration benefits of cities. But creation of housing is an opportunity, especially given the increased focus of the new government on ambitious delivery targets. Commercial real estate has a role to play in developing solutions to support the increase in homes for all ages and demographics, notably multifamily and single-family rental, co-living, student housing and later living. Investors are increasingly putting impact at the top of their agenda, making investments with the intention to generate positive, measurable social and environmental value alongside a financial return.”
A 2024 survey by investment bank Morgan Stanley revealed that 77% of individual investors plan to increase their sustainable investments in the year ahead, up from 57% of respondents two years ago. This increased interest in sustainability was due in large part to the financial performance of sustainable investments. JLL’s recent investors survey backs this up, with 97% of respondents planning to increase or maintain their focus on sustainability.
Within this, there is increasing attention towards social impact, says Nick Whitten, Head of Living Research, EMEA at JLL: “With 1.3mn households currently on the UK’s social housing waiting lists, and just 10,000 socially rented homes built last year, increased housing delivery will have a huge social impact.”
JLL have 150 sustainability specialists in the UK and the firm is at the forefront of the industry’s transition to environmental efficiency and social consciousness. This is complemented by a dedicated Energy & Infrastructure Advisory capital markets team focused on corporate finance transactions, giving JLL a huge presence in the renewables market, says Steve Jack, Energy & Infrastructure Advisory business lead.
“We see an increasingly deep and broad range of investors eager to find opportunities in renewable energy,” says Jack. “Besides the long-term macro trends of the race to net zero and energy security driving this, these are simply good investments.”
The UK is among global leaders in data centres renewables. Just last month the new government designated data centres as Critical National Infrastructure, placing them alongside energy and water systems. The change in government has also brought the lifting of the de-facto ban on onshore wind, with a record number of projects securing funding in the latest contracts for difference auction.
“As leading advisors across solar, wind, battery storage and other energy transition technologies, JLL have completed over 22GW of renewables deals across Europe since 2011 with a total Enterprise Value of £16bn,” concludes Jack, demonstrating the potential scale of the opportunity.