New research1 by re:sustain, the leading science-based technology platform which optimises the energy consumption of real estate assets, highlights the magnitude of the problem faced by European real estate institutional investors due to assets with poor energy efficiency.  Re:sustain surveyed 200 European real estate institutional asset managers in the UK, Germany, France, Netherlands, Spain and Italy, with a combined AUM of €296 billion.

Over half (58%) of respondents said that between 10% and 30% of their commercial real estate portfolio has poor energy consumption i.e. that which is materially above expected energy benchmarks for that asset type and location. One third (33%) said between 30-50% of their portfolio was performing badly and 11% said that more than 50% of assets in their portfolio have poor energy consumption.

Not only are investors facing declining values as a result, but 69% have also seen energy costs rise between 20% and 30% over the past two years, with 31% citing increases of more than 40% across their portfolios.  However, the majority (95%) of those surveyed have plans in place to improve the energy efficiency of their real estate portfolio, with 82% targeting energy consumption reductions of between 10% and 30% across their portfolios over the next three years.

In terms of tackling the problem, the research shows that for 58% of respondents, modernizing systems such as HVAC and electrics is a priority, followed by making greater use of technology to improve optimisation of existing systems such as controls, set points and scheduling (48%).  Modernising building management systems where needed was the third most likely action (45%) and demolishing poorly performing buildings came fourth (44%).

However, making changes to commercial buildings can be difficult, with respondents citing the complexity of coordinating landlords and tenants as the greatest challenge, with the capex and investment commitment second.  Business interruption while work and upgrades take place ranked third, followed by navigating complex regulations.  Economic and political uncertainty and a lack of professional expertise were also cited as challenges by respondents (ranked 5th and 6th respectively).

Commenting on the research Katie Whipp, Chief Business Officer at re:sustain, said: “The market has already changed — this research shows what’s actually happening. Poor energy performance is no longer a future risk; it is already impacting asset values, operating costs, and portfolio risk today.

“The findings highlight the scale of underperformance across real estate portfolios but also make clear that the barrier to action is not intent — it is execution. Delivering improvements in live, multi-tenant environments without disrupting income remains a fundamental challenge.

“As a result, we are seeing a shift toward approaches that can optimise assets in use quickly, with minimal operational impact. Improving energy performance is not just about reducing consumption — it is about strengthening resilience in an increasingly volatile energy landscape and protecting long-term returns.”

re:sustain was founded in 2021 by scientists who recognised that while data was being collected about real estate energy consumption, it wasn’t improving usage. To solve this problem, the re:sustain team developed innovative technology which uses collected building management system data (BMS) to create a highly calibrated digital twin of each building - an accurate model that reflects real asset performance. This dynamic thermal model allows for precise simulations and analyses, eliminating guesswork and enabling targeted interventions.

The proprietary re:sustain engine processes the digital twin data and the BMS data to identify inefficiencies and improvement opportunities, whilst calculating potential carbon savings. This remote approach allows for targeted optimisations and detailed mechanical insights on existing systems, reducing energy use, carbon emissions, and operational costs in support of sustainability goals—all without requiring Capex from asset owners or business interruption for occupiers.

To date, buildings using re:sustain technology have enjoyed 37% average annual energy savings in a process that takes just four to six weeks to implement.