On 26 April 2026, ESG considerations became non-negotiable in property valuation. The RICS Fourth Edition standard is now mandatory for all RICS-accredited valuers globally, requiring that ESG factors be explicitly modelled as drivers of cash flow, discount rates, and remaining useful life. This is not a reporting enhancement; it is a structural shift in how property assets are assessed and valued.

For listed REITs, the implications are clear and favourable for those with robust ESG credentials. Assets certified under frameworks like GBCSA Green Star or meeting equivalent standards will command lower cap rates and higher valuations. Conversely, non-certified or legacy assets face valuation pressure. This regulatory shift is a tailwind for disciplined REITs that embed ESG compliance in operations and asset management rather than treating it as remedial or optional.

iGroup’s portfolio benefits directly from this structural shift. Assets meeting sustainability standards enjoy enhanced valuation credibility and lower risk profiles. More broadly, this standard raises the cost of capital for sub-standard assets, widening the performance gap between REITs that manage ESG proactively and those that do not. As valuers apply this global standard, the disciplined REIT operator gains material competitive advantage.

Reference: RICS, ‘Global Standard on ESG and Sustainability in Commercial Property Valuation’, Fourth Edition, April 2026