Climate Risk & Commercial Property Values: A Review and Analysis of the Literature

This is a forward-looking climate risk analysis and assessment of the impact of climate risk on commercial property investments through pricing, CapEx or OpEx decisions.  The study sought to understand the extent to which real estate markets price in the risks from extreme weather and climate change and the channels through which the impacts of these risks on value have materialized.  It diagrams the potential financial materiality of climate risk on CRE assets to help practically apply the research.  Using the discounted cash flow (DCF) appraisal framework, it demonstrates how climate change physical risks feed through to income-property pricing.