JLL: Energy availability impacting CRE values globally

Energy availability is rapidly becoming a defining factor in commercial real estate decision-making, with implications for development viability, asset values and long-term performance, according to new research from JLL.

In its report, Where energy meets property, JLL warns that rising power demand, grid constraints and decarbonisation pressures are creating a “perfect storm” for two traditionally separate sectors – energy and real estate – that are now becoming increasingly interlinked.

The consultancy identifies four structural forces reshaping the market: accelerated electrification and load growth; grid bottlenecks driven by physical and regulatory constraints; the rapid deployment of clean power; and the digitalisation and decentralisation of energy systems. Together, these trends are expanding real estate’s role within the energy value chain and elevating energy resilience to a boardroom priority.

Josephine Tucker, head of energy advisory and sustainability, Americas at JLL, said energy disruptions are now a widespread business reality across sectors including data centres, advanced manufacturing and life sciences. She noted that tenants are showing a willingness to pay a premium for properties with dependable power access, with measurable “power premiums” reaching as high as 49% in some cases.

Electricity demand is rising after decades of relative stagnation, driven by AI, data centres, reshoring, advanced manufacturing, automation and electric vehicle charging. According to the International Energy Agency, electricity demand could grow by around 40% or more by 2035, far outpacing overall energy demand.

However, grid infrastructure has not kept pace. Connection timelines for large new loads in major data centre markets are now approaching five years on average (The SectorScope has reported that, in the UK, that timeline can be as long as ten years), effectively making power access a binding constraint before construction even begins. Industrial power prices across major economies have also risen sharply, increasing by approximately 18% between 2019 and 2024, compared with just 4% growth in the previous five-year period.

Data centres have become the most visible example of energy-intensive development, with JLL projecting nearly 100 GW of global capacity to be added this decade. Industrial and logistics facilities are also seeing power requirements multiply as automation and electrification increase operational intensity. Meanwhile, the expansion of EV charging infrastructure across workplaces, retail and logistics sites is placing additional strain on local grids.

In response, on-site energy solutions are gaining momentum. Modern energy management platforms now integrate on-site generation, battery storage, building systems and EV charging into unified control systems, enabling operators to manage peak demand, shift loads and optimise costs.

Battery energy storage systems (BESS) are expected to play a key role, with costs falling significantly over the past decade. Strategically deployed storage can reduce reliance on grid upgrades and support uninterrupted operations in power-sensitive sectors.

Guy Grainger, global head of sustainability services at JLL, said properties equipped with smart energy management and on-site generation now hold a clear competitive advantage, with energy security becoming permanently linked to real estate value across major sectors.

The report highlights that clean energy has accounted for more than 90% of new global power capacity added since 2020, driven largely by falling costs and faster deployment timelines. Global annual energy transition investment reached $2.3 trillion in 2025, more than doubling compared with 2020.

JLL concludes that buildings, which account for around 30% of final energy consumption, sit at the centre of the current power crunch and represent one of the most adaptable levers within the energy system. As decentralised and digital capabilities expand, real estate is beginning to interact directly with power networks rather than simply consuming electricity – reshaping how assets are valued and developed in energy-constrained markets.