European insurance asset managers are facing mounting financial pressure from poorly performing real estate assets, with new research showing that energy inefficiency is already eroding portfolio values across the continent.
The findings are drawn from a survey of 80 European insurance asset managers across the UK, Germany, France, the Netherlands, Spain and Italy, conducted by Pure Profile in February 2026 and published by re:sustain, a London-based technology platform that optimises energy consumption in real estate assets. The firms surveyed hold combined assets under management of €117 billion.
More than half of respondents (52%) said between 10% and 30% of their commercial real estate portfolio exhibited poor energy consumption, defined as materially above expected benchmarks for an asset's type and location. A third reported that between 30% and 50% of their holdings were underperforming on energy, while 14% said more than half of their assets fell into that category.
The consequences are already measurable. All 80 respondents reported holding stranded assets - properties experiencing reduced capital value, leasing income or future liquidity tied directly to energy performance. Over two-fifths (43%) said these assets had declined in value by between 20% and 30% over the past three years, with a further 31% reporting falls of between 30% and 40%.
Looking ahead, 30% of respondents expect the number of stranded assets in their portfolios to grow by between 5% and 10% over the next five years, while 35% anticipate an increase of between 10% and 25%.
Katie Whipp, chief business officer at re:sustain, said the scale of the problem had moved beyond future risk. "Our research highlights that the extent of real estate assets affected by poor energy performance is no longer a future risk - it is already being priced into asset values. The findings make clear that a material share of portfolios are underperforming on energy, and that this is translating directly into value erosion and increasing liquidity risk," she said.
Despite the scale of the problem, 96% of respondents said they have plans to improve energy efficiency, with 78% targeting consumption reductions of between 10% and 30% across their portfolios within three years.
Those intentions face practical barriers. The complexities of coordinating landlords and tenants were identified as the most pressing challenge, ranking above access to capital, the cost of modernising HVAC and building management systems, and rising construction costs. Over two-thirds (68%) said the risk of business disruption to occupiers had become a reason not to proceed with upgrades at all.
When asked specifically about tenant-related obstacles, three-quarters cited difficulty securing tenant buy-in for energy improvements, while 58% pointed to the challenge of changing tenant behaviours to reduce energy use. A third said minimising business disruption to occupiers was their greatest concern, and 29% flagged the difficulty of coordinating upgrades across multi-tenant buildings.
Against that backdrop, respondents pointed to lower-disruption technology as the most promising path forward. Three-quarters said remote optimisation tools - software capable of adjusting building systems without physical intervention - would have the greatest impact on energy performance. That outranked investment in new building management systems at 61% and new lighting and HVAC systems at 50%.
"The challenge is not a lack of intent or capital - it is the complexity of delivering change in live, multi-tenant environments without disrupting income," said Whipp.
