Skip to main content
TOOLS
Login to access your documents and resources.
Welcome to Nuveen
Select your preferred site so we can tailor your experience.
Select Region...
  • Americas
  • Asia Pacific
  • Europe, Middle East, Africa
location select
Select Location...
  • Canada
  • Latin America
  • United States
  • Australia
  • Hong Kong
  • Japan
  • Mainland China
  • Malaysia
  • New Zealand
  • Singapore
  • South Korea
  • Taiwan
  • Thailand
  • Other
  • Abu Dhabi Global Market (ADGM)
  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Spain
  • Sweden
  • Switzerland
  • United Kingdom
  • Other
location select
Institutional Investor
  • Institutional Investor
  • Individual Investor
  • Financial Professional
  • Global Cities REIT (GCREIT)
  • Green Capital
  • Private Capital Income Fund (PCAP)
location select
This site has been created for exclusive use by institutional investors only and does not take into account the investment objectives, financial situation or specific needs of any individual investor. Information from this site should not be the sole basis for any investment decision.
Privacy notice Cookie policy, terms of use
Accept to continue
Real estate

Tracking the real estate energy transition

Abigail Dean
Head of Strategic Insights, Nuveen Real Assets
Mark Cameron
Head of Sustainability, Asia Pacific
18 Jun 2025  
Reading time: 1 min
Aerial view of office buildings
Download PDF

Despite considerable progress on decarbonisation over the past decade, the global built environment is currently not on track to become net zero carbon by 2050.

Realising a net zero carbon transition for the built environment will require critical objectives being met. Tracking indicators of progress towards these outcomes gives an idea of the pace of transition and if these goals are not reached, the transformation is unlikely to occur.

We have identified six indicators and classified them as an accelerant, bottleneck or neutral based on our assessment conducted in 2025.


Download the report

Click the indicators below to explore highlights from the report:

Investor appetite
Investor appetite

Investor allocations will be based on decarbonisation goals

  • Investors continuing to allocate capital to low and zero carbon products is essential in supporting the transition
  • Regional variances are quite stark, with U.S. investors less likely to give weight to ESG, climate risk and net zero carbon (NZC) factors than their EMEA or APAC counterparts
  • Despite the ongoing consideration of NZC in allocations, investors do report seeing a slower pace to the energy transition than three years ago, with 61% responding that they see the transition to a low carbon economy as inevitable, down from 79% in 2023

Download the report

The impact of investor appetite on the energy transition

Gauges in a row

Previous indicator
Next indicator
Grid decarbonisation
Grid decarbonisation

Electricity grids in specific regions will continue to decarbonise

  • Global electricity grid carbon intensity has dropped 7% in the period of 2000-2023
  • The U.S. has led the way with a 35% reduction whilst Europe has cut 30%. Asia lags somewhat with a 6% reduction
  • The outlook for grid decarbonisation remains positive as renewables capacity accelerates and coal is phased out. Future forecasts indicate that several markets are well-positioned to transition or have already met global requirements
  • Buildings located in low carbon intensity grids will ultimately be cheaper to transition to net zero carbon, as they will not need to reach the same low levels of energy intensity to achieve net zero carbon standard
Download the report

The impact of grid decarbonisation on the energy transition

Gauges in a row

Previous indicator
Next indicator
Supportive supply chain
Supportive supply chain

Supply chain dynamics will support energy transition

  • Real estate supply chains’ ability to deliver on net zero carbon is crucial to meeting ambitious targets
  • Construction costs continue to track above inflation which leads to a bottleneck effect as necessary retrofits and building improvements become less commercially viable
  • Lack of skills and costs of retrofitting buildings constrains the pace of transition
  • Around 80% of buildings in cities today will remain in 2050. To meet the transition, retrofitting of older stock must increase from around 1% to 3% annually, a considerable increase
Download the report

The impact of supply chain on the energy transition

Gauges in a row

Previous indicator
Next indicator
Cheaper technology
Cheaper technology

Technology to make buildings more energy efficient will continue to improve and reduce in cost

  • Reducing energy demand from existing and new buildings is key to the transition
  • To meet future projections, a further 44% reduction in energy intensity is required so continued innovation and cost reduction of technologies is paramount
  • While costs continue to fall for key technologies, challenges persist with implementation due to costs of installation, need for upfront capital and installer availability. A further consideration of electrification is the cost of electricity, which in some cases can be higher than using natural gas
Download the report

The impact of cheaper technology on the energy transition

Gauges in a row

Previous indicator
Next indicator
Tightening regulation
Tightening regulation

Building regulation around energy and carbon efficiency will strengthen

  • Regulations supporting the low carbon transition have developed at pace with new disclosure, taxonomies, ratings and accounting standards introduced
  • Europe will likely continue leading across the spectrum of regulation
  • The Asia Pacific region currently has lower stringency of regulation, however, it is moving towards alignment with Europe, particularly in markets where Nuveen invests
  • The outlook in the U.S. is complex. At a federal level it is unlikely that further regulation will be introduced. At city and state level it is more nuanced. Over 40 jurisdictions, accounting for almost 25% of U.S. building stock, have joined the National Building Performance Standards Coalition
Download the report

The impact of tightening regulation on the energy transition

Gauges in a row

Previous indicator
Next indicator
Occupier demand
Occupier demand

Occupiers’ net zero carbon goals will inform their space requirements

  • Strong occupier demand is a crucial factor in decarbonising buildings
  • In 2024, more than 7,300 companies representing over 40% of global market capitalisation had an approved Science Based Target in place. The number of signatories has risen exponentially
  • This growth in occupier demand is being met by a limited supply of suitable assets. Recent data suggests a 70% supply shortfall in low carbon office buildings out to 2030
  • The supply/demand dislocation can be seen to produce rental premiums in certain markets where data indicates premiums of 5-10% are possible
  • When considering allocations, there are opportunities where a supply/demand imbalance exists
Download the report

The impact of occupier demand on the energy transition

Gauges in a row

Previous indicator
Next indicator

About the authors

Abigail

Abigail Dean

Head of Strategic Insights, Nuveen Real Assets
Mark

Mark Cameron

Head of Sustainability, Asia Pacific
Lowercase 'n' Nuveen logo

Learn more about our sustainability initiatives

Learn more

Related articles

2025 Impact hero
Real estate 2025 U.S. Affordable Housing Impact Report
Explore our dedicated housing impact investments in the U.S. to combat the shortage of affordable housing.
26 Aug 2025
Copper-colored geometric building facade against blue sky
Real estate 2024-2025 Real Estate Sustainability Report
Our 2024-2025 sustainability report provides an update on our achievements to date and our plans for the future for all things ESG related.
18 Aug 2025
Illustration of the earth at night illuminated by an interconnected network
Real estate Q3 2025 Global Trends and Tactics
18 Aug 2025
Contact us
London skyline
London
small-phone-icon
+44 20 3727 8000
201 Bishopsgate, London, United Kingdom
Footer Arc Background

Discover

Our Company

The information contained on this website is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. YOUR CAPITAL IS AT RISK. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. 

Products, services, or strategies shown may not be available in certain jurisdictions and/or to certain investors. Recipients should inform themselves about and observe any applicable legal requirements. This material does not constitute a solicitation of an offer to buy, or an offer to sell securities in any jurisdiction in which such solicitation is unlawful or to any person to whom it is unlawful to make such an offer. Any funds described herein are not for sale in the US or to US persons and are available under the conditions of the relevant offering document(s). If you are a US citizen or resident, please visit our website for US Financial Professionals or US Institutional Investors. Nuveen provides a range of products including investment advisory services, strategies, and expertise through its independent investment affiliates. Securities are offered through Nuveen Securities, LLC.

© 2025 Nuveen, LLC. All rights reserved.

4502237
Back to Top