As the impacts of climate change become more evident and urgent, the real estate industry must evolve to meet both environmental obligations and economic opportunities.

For Kenya, this transition is not just desirable; it is enshrined in law and international commitment.

 

Kenya's Climate Change Act of 2016 mandates the integration of climate resilience into development planning, calling for sustainable practices across all sectors—real estate included. This aligns with Kenya's commitment to the Paris Agreement, which aims to limit global temperature rise to well below 2°C. The built environment, responsible for a significant percentage of greenhouse gas emissions, is central to achieving this goal.

 

Green certified buildings, which adhere to internationally recognized standards such as LEED or EDGE, offer a practical and impactful way to meet these commitments.

Why Green Buildings Matter to Landlords and Tenants

1. Cost Efficiency and Operational Savings

Energy-efficient buildings lower utility costs significantly through better insulation, lighting, and smart energy management systems. For tenants, this means lower operational costs. For landlords, it increases the market value and appeal of their property.

2. Climate Resilience and Asset Longevity

Green buildings are designed with climate resilience in mind—resisting heat waves, water scarcity, and flooding. This enhances asset durability and reduces maintenance costs, making them smarter long-term investments.

3. Occupancy Rates and Marketability

Tenants, especially corporates with ESG mandates, are increasingly seeking sustainable office spaces. Green certifications serve as a badge of quality, enhancing a building’s marketability and occupancy levels.

4. Compliance and Risk Mitigation

Buildings that do not align with sustainability standards risk becoming stranded assets in the long run. They will be unattractive to investors and tenants alike.

How does this impact Asset Management in the Age of Climate Responsibility?

Sustainable asset management now goes beyond regular maintenance. It includes:

1.       Energy audits and retrofits

2.       Integration of renewable energy sources

3.       Lifecycle costing to prioritize sustainable upgrades

4.       Real-time environmental impact monitoring

Asset managers must be proactive in upgrading existing buildings to green standards and maintaining certifications to future-proof their investments.

Policy Recommendations for a Greener Built Environment

         I.              Incentives for Developers and Landlords

Policymakers should introduce incentives such as:

a.       Tax rebates for green certified developments

b.      Fast-tracking of building approvals for sustainable projects

c.       Waivers on stamp duty or land rates for certified properties

These actions will stimulate demand and reduce the upfront costs associated with green development.

The Role of Financial Regulators in Accelerating Green Real Estate

Financial regulators can also play a crucial role by:

a.       Promoting green financing instruments such as green bonds, green mortgages, and sustainability-linked loans.

b.      Encouraging banks and financial institutions to assess climate risks in real estate portfolios.

c.       Supporting the creation of sustainability benchmarks and disclosure frameworks for real estate investments.

These tools can unlock capital for sustainable developments and guide institutional investors toward climate-aligned portfolios.

Conclusion

The pathway to a sustainable and resilient real estate sector in Kenya is clear and actionable. Green certified buildings offer benefits that extend beyond environmental stewardship—they are financially sound, legally aligned, and increasingly demanded by forward-thinking tenants. For landlords, tenants, policymakers, and financial regulators, the time to act is now. Embracing sustainable real estate isn't just good for the planet; it's smart business.