Sustainability, liquidity and the cost of capital: why the real opportunity lies ahead for developers
Dee Korab, Head of Impact at Puma Property Finance, explores why sustainability is now essential for protecting value and attracting investment.
Developers today are operating in an environment where every decision is under pressure. Construction costs remain elevated, interest rate uncertainty has re-entered the outlook, and developers are increasingly focused on how capital is spent and where it can deliver the greatest certainty. In that context, sustainability can no longer afford to be theoretical. It has to earn its place commercially.
For much of the past decade, the industry has focused on whether strong sustainability credentials deliver a clear “green premium.” In many markets, that premium has been slow to materialise, although it does exist: around 10% of investors say they are willing to pay more, and in sectors such as offices the bifurcation is increasingly clear.
The more pronounced shift, however, has been at the other end of the market, with a growing proportion of investors now treating sustainability performance as a baseline requirement rather than a differentiator.
Recent findings from CBRE’s European Investor Intentions Survey underline how stark this shift has become. Just under 30% of investors now demand a discount for weak sustainability performance and just over 20% will not invest at all if an asset has poor sustainability credentials. With 88% of investors1 actively factoring sustainability into their decisions, the issue is no longer one of marginal pricing uplift, it is about access, liquidity and who is willing to invest.
For developers, that distinction matters. Values are ultimately driven by competition. When the buyer pool for your asset narrows, exit optionality reduces and downside risk increases. Valuations may lag these realities, but investor behaviour rarely does.
The positive news is that this shift presents a clear opportunity for developers. Those who embed strong sustainability credentials early are better placed to protect value, attract institutional capital and future‑proof assets against higher expectations. The challenge, however, is making that case internally when project teams are balancing cost, programme and delivery risk.
This is where finance can play a role.
At Puma Property Finance, we believe sustainability should be rewarded, not simply requested. Through our Impact Lending Framework (ILF), we directly link verified environmental and social outcomes to the cost of capital. Developers targeting and achieving recognised standards such as EDGE certification or BREEAM, alongside other impact metrics, can access a fee reduction of up to 1% of the total loan amount, a material, quantifiable saving that can be evidenced from day one.
That incentive is deliberate. It allows project teams to clearly demonstrate the financial return of higher performance to boards and investment committees, alongside the broader market evidence. As investor expectations have risen over the last 12 months, our framework has evolved too, with incentives aligned to best‑in‑class outcomes, including BREEAM Excellent and above.
This year, we were proud to see the first development achieve certification under the ILF, proof that aligning finance with delivery can reward excellence in practice, not just in principle.
The direction of travel is clear. Sustainability is now central to maintaining liquidity, resilience and institutional relevance. Our role at Puma is simple: to support developers who want to lead on sustainability, by backing them with funding that recognises long‑term value and delivers immediate financial benefit.
If you’re planning your next scheme and want sustainability to strengthen, rather than stretch, your viability, we’d welcome the opportunity to talk.