Power: The New “Location, Location, Location”?
For decades, real estate value has been shaped by familiar fundamentals: location, connectivity, specification, amenities, and occupier demand. Today, we need to add a new critical factor: power availability, capacity, cost, and flexibility.
Power is shifting from a simple operational line item to a core characteristic of the asset itself. It can constrain future use, drive occupier value, require strategic capital investment, and directly generate revenue.
For many assets, the question is no longer just about energy efficiency—it’s whether the building has the power capacity to support what its occupiers need today and tomorrow.
The Capacity Crunch
We need to electrify almost everything, everywhere, just as the electricity grid itself undergoes a complete overhaul.
- Heat pumps are replacing gas boilers.
- EVs are replacing internal combustion engines.
- Digital infrastructure and data centres are expanding rapidly alongside AI.
- Industrial sectors are heavily scaling up automation.
As a result, electricity demand is set to surge. According to NESO’s 2025 Future Energy Scenarios, UK demand will jump from ~290 TWh in 2024 to between 705 and 797 TWh by 2050.
A building can be highly energy-efficient and still face commercial constraints if it lacks the electrical capacity to support EV charging, heating upgrades, automated operations, or tenant expansion.
For property owners, this bottleneck represents both a risk and a major opportunity.
Power as a Real Estate Differentiator
Buildings are no longer just passive consumers of electricity—they are becoming active components of the energy system.
By generating power through solar PV, storing it in batteries, shifting demand via intelligent controls, and offering flexibility services back to the grid, assets can capture real commercial value.
Consider two otherwise comparable assets:
- Building A: Has limited electrical capacity, faces costly grid upgrades, and cannot easily support EV chargers, heat pumps, or higher tenant loads.
- Building B: Has sufficient capacity, on-site generation, battery storage, and active energy management.
Are these two assets really worth the same?
We are already seeing a “power premium” emerge:
- JLL research found that 90% of respondents would pay a premium for sites with reliable energy infrastructure.
- In Silicon Valley, high-power leases achieved rents 49% higher on average than standard leases over a three-year period—and 33% higher than rents in brand-new buildings.
While Silicon Valley is a distinct market, the signal for the UK is clear: reliable access to power is becoming a prime commercial differentiator.
Unlocking New Revenue Streams
The opportunity extends beyond rental uplift. Assets that generate, store, and intelligently manage energy can cut operating costs, flatten peak demand, boost resilience, and generate new revenue through grid flexibility services.
Case in Point: We recently advised a client looking to retain spare grid capacity for future EV and automation needs without taking on a financial penalty. By combining solar PV, EV charging, and battery storage with grid flexibility services, the client created a brand-new revenue stream—more than offsetting the cost of holding that future capacity.
Energy infrastructure now creates value on multiple fronts at once:
- Lower operational costs
- Avoided capital expenditure
- Stronger occupier appeal & resilience
- Preserved future utility
- Direct revenue generation
The Big Picture: Enabling Net Zero at Lower Cost
The property industry’s traditional focus on energy has been to reduce consumption and cut carbon. While those goals remain vital, the mandate has expanded.
Real estate investors now have the chance to help decarbonise the grid and reduce overall energy costs by unlocking building flexibility—all while meeting tenant demands and opening up new income streams.
The core question for investors is no longer just “How energy efficient is this building?”
Instead, we must ask:
- What will electrification cost?
- How much power can the asset access, generate, store, and flex?
- And most importantly—what is that dynamic capability worth?