Epra 2008: UK companies top sustainability list

British Land and Land Securities scored highest on sustainability in an analysis carried out by JP Morgan. The results of the research 'Survival of the Fittest' were presented Thursday at the annual conference of the European Public Real Estate Ssociation (EPRA) currently being held in Stockholm.

'Sustainability will be a key differentiator for European listed real estate companies as they face increasingly stringent regulatory standards,' noted the report's co-author Harm Meijer. 'On a broader basis, Environmental Social and Governance concerns are also gaining momentum with tenants and investors, for example as they look to reduce energy costs. The European real estate companies that are best able to enhance shareholder value from a firm and demonstrable commitment to sustainability initiatives, will increasingly outperform the market.'

The high ranking of UK companies was related to the strong involvement of the UK government in environmental regulation and targets, Meijer added. 'Continental companies are less prepared for what is happening on this front. Some companies really need to step up their actvities.'

Another finding of the report was the relative robustness of tax-efficient REIT (Real Estate Investment Trust) structures in the European market compared with non-REIT property stocks. 'European REITs have capitalised on lower levels of leverage and higher levels of disclosure to outperform non-REITs by more than 11% year-to-date,' Meijer said.