How real estate is preparing for electric cars
As charging infrastructure expands, industrial real estate could play a big role
Landlords are increasingly incorporating charging infrastructure into their buildings as part of plans to make their portfolios more sustainable.
Take Lendlease, which is installing at least 80 electric vehicle (EV) chargers in its properties, including popular shopping complexes in Australia.
In the U.S., industrial developer Clarion Partners has established more than 348 chargers for electric vehicles (EVs) across its properties.
“Buildings are the green petrol stations and power stations of our future,” says Renae Gasmier, head of Sustainability Consulting – Australia, JLL.
The projects come as EVs account for 14% of new car purchases globally, according to the Australian Electric Vehicle Council. China leads the way with EVs making up 28% of car sales in 2022, while Australia is lagging with only 4%. New EV sales in the U.S. made up 7% of total sales to January 2023, according to Inside EVs.
With electric cars on the ascendency, the property industry is looking to stay ahead of the curve.
“By building EV charging infrastructure, we’re not only meeting growing demand, but also creating a whole new source of power-grid support because the grid can also draw or store power from EV batteries,” says Gasmier.
Providing car charging stations isn’t just going to help countries toward their sustainability targets. Buildings deemed “green” drive higher occupancies, rents, tenant retention and asset values, according to a 2022 JLL survey of investors and occupiers.
Looking for more insights? Never miss an update.
The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.
A role for industrial real estate
A report from the Australian Electric Vehicle Council notes that less than 0.5% of all cars on Australian roads are EVs. However, to reach the International Energy Agency’s target of net zero emissions by 2050, the number must be close to 100% by then.
Industrial real estate occupiers and owner-occupiers could be the most influential in achieving this, Gasmier says. This is because many logistics and other distribution companies are looking to electrify their fleets.
“That said, there are a lot more considerations in industrial real estate compared to elsewhere, such as ensuring you’ve got enough power supply capacity, battery storage and the availability of fast charging,” she says. “Industrial real estate is also the critical infrastructure that surrounds supply chains, and supply chains are within many organisations’ Scope 3 emission reductions.”
It may be tempting to engage hardware and software providers, and charge point operators, in a seemingly turnkey deployment. However, failure to carefully evaluate and strategically plan for EV charging infrastructure can lead to lacklustre results characterised by greater expense, a stressed power grid, low quality implementation or missed revenue opportunities.
The risk is being short-sighted, Gasmier says.
“There are new business models and technology emerging and organisations need to consider this to take full advantage of the future value,” she says. “There are also considerations around load management systems, peak charging times and power capacity.”
Green government support
As landlords and investors build strategies to incorporate EVs in buildings, legislation and other incentives are helping accelerate the shift to electric.
The European Parliament passed a law in February that effectively bans the sale of new petrol and diesel cars in the European Union from 2035, while the U.S. government is investing $7.5 billion in charging infrastructure, $10 billion in clean transportation, and more than $7 billion in EV battery components.
Australia’s National Electric Vehicle Strategy introduces the country’s first vehicle fuel efficiency standard, which will encourage manufacturers to supply more EVs into the country. It will also support integrating EVs more broadly by supporting initiatives such as battery recycling, infrastructure planning and charging inclusions in apartment building design, Gasmier says.
It’s not only regulation pushing for change. Government tenants in Australia have been stipulating EV charging in leases as they plan to replace their fleets with electric cars over the coming years. The Australian government announced last August its intention for its cars to comprise 75% EVs across both new leases and purchases by 2025.
“We’ve seen an appetite and a noticeable gear shift from government agencies as they are preparing themselves for the electrification of their fleets,” says Gasmier. “Fleet vehicles make up around 17% of the total number of cars on the road in Australia but they’re responsible for 42% of road transport emissions. So, if fleets make the first move to decarbonise, it will have real effect for everyone.”
聯繫 Renae GasmierHead of Sustainability Consulting – Australia, JLL
What’s your investment ambition?
Uncover opportunities and capital sources all over the world and discover how we can help you achieve your investment goals.