Bricks & More: Unlocking Real Estate Value

How to profit from power with Lorna Walker

• Adrian Strittmatter • Season 2 • Episode 5

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In this episode of Bricks & More, Adrian Strittmatter sits down with Lorna Walker, co-founder of Camion Energy, to uncover a new kind of real estate value unlocker – your energy strategy.

Lorna explains how controlling consumption, electrifying portfolios, and leveraging onsite energy infrastructure can turn costs into ROI. Drawing on her experience at CBRE and her entrepreneurial ventures, she reveals why the real estate and energy sectors are no longer separate – they’re converging.

Key talking points:

⚡ Why electrification isn’t just an environmental move – it’s a financial one

🏢 How landlords can turn energy from a sunk cost into a revenue stream

📈 The overlooked NOI uplift hiding in onsite solar and storage systems

🧠 How data science and AI are transforming energy management at scale

🌍 Why future-proofing assets means merging real estate and infrastructure thinking

If you still see energy as an operating cost, this episode will change your perspective — showing how power can literally power value.


Lorna’s LinkedIn: https://www.linkedin.com/in/lorna-j-walker 

Camion Energy: https://www.camion.energy/  


Adrian’s LinkedIn: https://www.linkedin.com/in/adrianstrittmatter 

Saentys: https://saentys.com/ 

Adrian Strittmatter:

Today we will discover a real estate value unlocker. Which is not square footage efficiency, design finishes, or tenant led amenities, but something much more technical. Your energy strategy. What if controlling consumption and managing assets like energy storage systems turn cost into ROI? I'm absolutely thrilled to welcome Lorna Walker, co-founder of Camion Energy, a company helping real estate owners and investors unlock asset value by electrifying portfolios at scale, and staying ahead of grid capacity constraints. A driven and entrepreneurial leader with over a decade in senior roles at CBRE and experience of co-founding a modular housing startup, Lorna Combines deep real estate expertise with a passion for innovation and sustainability. Her work at Camion is shaping how energy optimization can drive NOI growth, enhance lease appeal, and future-proof assets, all while tackling one of the biggest challenges in real estate, the energy transition. So let's dive straight in. Lorna, welcome to the podcast.

Lorna Walker:

Thank you for having me.

Adrian Strittmatter:

It's lovely to have you on the show. We started working together a long, long time ago. Now, when you were at CBRE, can you tell us a bit about your, your journey through, through real estate?

Lorna Walker:

Yeah, of course. So I, I've got a fairly traditional real estate background. I started at CBRE as you know, on the graduate scheme. And I was a noncog, so I'd come, I'd done languages and economics, and I did a part-time master's whilst, so I was there. I. I did various different things at CBRE valuation, mixed use development, real estate finance was i'd, I'd say it was always very valuable early in my career to do that real estate finance piece. I was working in this loan and corporate recovery side at the time of the financial crash, and actually one of the best ways to learn how to do real estate right, is to actually learn how people have done it wrong. so that was really great experience. The bulk of my time at, at CBRE though was in capital markets. Um, and you and I, crossed paths when I was in the European Capital Markets team. and then I was, very lucky to then work in the UK capital markets team. After CBRE, I'd bought out this business called Franc Warwick. there was a guy called Franco Sidoli who came across there. And I joined Franco as his right hand person to navigate the world of CBRE. And one of the things that was really great about that is I wasn't pigeonholed into one specific niche of the market. I actually got to do a bit of everything. you know, one week we'd be selling a messy industrialist estate on the outskirts of Manchester. And then the next, we were selling Madam Taussauds in Central London. and. You would do, you know, everything in between shopping centers, business parks. So it was a really great experience to actually understand, the whole market. Mm-hmm. And I think the other thing that I really got from working with Franco and the team that came across was they had this real entrepreneurial spirit. Mm-hmm. and, and so actually. It was this great mix because you had this really ambitious entrepreneurial vibe, but you were also inside this big corporate and you know, CBRE did a very good job as well at trying to harness that and capture that whilst in a corporate environment. And, you know, a couple of the other things that I did at CBRE is, you know, I was very interested in sustainability. Right from the start before my time at CBRE. And, I worked on and led various different initiatives around that, over my time at CBRE as that sort of ebbed and flowed and, you know, went on the journey, that it did. And the other thing was PropTech and innovation and, you know, I was incredibly interested in how that could be used to actually, you know, harness solutions and bring them, to the market at scale. So I think a combination of all those things, and probably a bit of that, you know, entrepreneurial spirit that had been kickstarted by that, that team that had come across C-B-R-E-I left CBRE in 2020 and I was co-founder of a modular housing startup, which was a really fascinating journey. And then, a couple of years ago, I co-founded Camion, with my co-founder Jake.

Adrian Strittmatter:

You've talked about sort of entrepreneurial spirit, sustainability and, and, and tech. Would you say that's the kind of red thread that sort of has, has driven you to, to Camion energy?

Lorna Walker:

Yeah, I think you know that that's, that, that's probably a pretty good way of putting it. Maybe if you were, I think to put something around it. You'd say it was innovation that has been some of that common thread and actually looking at how do you innovate so that we are creating and nurturing the best places for people to live, work, and play.'cause ultimately that's what we would say is, and, and actually just yesterday we were chatting to a big fund landlord who's actually got several funds and they gave this amazing example that across all of their funds and all of their real estate, there are 10 million people that live, work and play across their real estate estate

Adrian Strittmatter:

the uk,

Lorna Walker:

It's it's a global

Adrian Strittmatter:

global. Okay.'cause I was gonna go say that's like a,

Lorna Walker:

But, but what's incredible, so it's a global client, and they're very big, but you know, they're not the biggest, but you know, they are, they are

Adrian Strittmatter:

still 10 million

Lorna Walker:

there's, there's several, you know, there's many others out there, of a similar scale, and it was actually such a. Lovely way to look at it. They've got 10 million people occupying their buildings and they wanna live in the best way possible. They wanna work in the best way possible, play, you know, whatever they're doing, in that real estate. And so actually I think our responsibility as real estate professionals is to look at, okay, well, you know, that's, that's a the size of a city bigger than London. And so it's

Adrian Strittmatter:

population.

Lorna Walker:

It's the Swiss population. There you go. Not yet,

Adrian Strittmatter:

Well, not yet, but nearly. Yeah. Yeah, it's

Lorna Walker:

and so I thought it was a really nice way of looking at it and actually, you know, so I think as, you know, stewards of the real estate environment, I think for me it's about how do you use innovation for that real estate to reach its full potential, so that those people who are operating in it can reach their full potential.

Adrian Strittmatter:

I think that's a really nice way of putting it. And I think that looking at the, the benefits that you can bring to, as you said, occupants, investors, stakeholders within that I think is the, is in essence the right way of putting it in terms of the benefits. In terms of Camion energy. Would you be able to give us a sort of, well, firstly, a bit of an anecdote of where did, where did the name come from?

Lorna Walker:

And I, as you know, I love that you pronounce it Camion energy because you're one of the very few that does. and that is because, as you know, the origin of Camion is is lorry, is truck, which, you know, it's camion in French there's also camión and you know, Spanish and a few other languages as well. And so the, the origin of Camion is you've got the meeting of these two different worlds, real estate and clean energy, and they're coming together and there's huge opportunities there. And how do you unlock these opportunities? And actually one of the ways that you unlock these opportunities is by really understanding the demand for energy. And sometimes the reason that clean energy infrastructure doesn't work is because there's not enough demand. And so rather than seeing the demand for energy as a problem, we see it as an opportunity. And so this is where the truck and the HVS come into play because actually they have a huge energy demand. Mm-hmm. And so if you are bringing that energy demand on site, let's say to a warehouse. Mm-hmm. then actually that energy demand is something that might unlock the viability of a solar and battery project, for example. and so that was the origin of it. We started with it and it stuck. but I think it very much tells a story of what we're trying to do is that you've got real estate, you have energy and energy demand is this actually, you know, amazing lever that can help to unlock the opportunities that exist.

Adrian Strittmatter:

And so clearly in, in that sense, then there is that opportunity, but Camion is also as you said, or we've been talking about mission led. how does that come into the, sort of, the overall idea, but also, how does it make the proposition different that you guys are coming with?

Lorna Walker:

I think it's about. The way that you're bringing these two different industries together. So you've got the real estate piece and you've got this clean energy piece. Mm-hmm. One of the things that we're doing, which I think really differentiates and makes what we're doing different, is that the foundation though, of having brought those two things together is that there is a foundation of tech and data science and AI in what we're doing. And actually the only way that you can really properly solve energy and actually reach the right conclusions and act in the right way is with data. And that's why the AI and the, you know, data science behind it is so important.

Adrian Strittmatter:

Solve the energy, I think is topical at the moment, is electrification one of the solutions or how do you see this energy crisis or challenge or opportunity? How do you see that being solved or harnessed? If we're looking at the opportunity?

Lorna Walker:

you are right that, you know, energy can be a challenge, but I very much see there is a huge opportunity here, with regards to energy and what's coming. And I think one of the stats that I think is quite interesting around this is that, in Europe today 20% of energy demand is electric. Mm-hmm. And by 2050, it's forecast that 60% of energy demand will be

Adrian Strittmatter:

And that's demand. That's not supply.

Lorna Walker:

That's demand. so the, the, the shift will go from, there's the moment 20% of energy demand and, you know, you are using sort fossil fuels and other mm-hmm. Energy fuels, essentially, for, for the rest of that. And that's gonna move up to 60%. So there, there's a huge shift there. and so yes, like electrification, you know, is absolutely, one of the ways, in which this is gonna evolve and transition and the solutions as to actually, you know, how we support that transition, they are myriad. and we think that onsite energy infrastructure is gonna be a huge part of that and is gonna be incredibly important.

Adrian Strittmatter:

diving into sort of where the topic around how real estate meets energy. And maybe it's something that everyone takes from their sort of personal approach to energy. Oh, you know, I've got my electricity bill, got my gas bill. And most people then see energy as a cost. How? How do you see it as a value generator then?

Lorna Walker:

Yeah, so I think one of the really interesting things for commercial landlords is that actually energy has this potential to be this opportunity and to create value for them. and so if we take for example, the case of an industrial logistics building, and you've got a tenant who's in there today, and, and let's go down this route of, they might be electrifying their fleets of vehicles and, and actually just. a little note on that is that as at today, it is breakeven or actually cheaper to own an electric-like commercial vehicle compared to a diesel-like commercial vehicle from a lifecycle cost basis. So it makes sense to own an electric

Adrian Strittmatter:

And that's only gonna get better

Lorna Walker:

and that's only gonna get better. you know, and at the moment HGVs aren't quite there yet, but that's definitely the direction of travel for electric HGVs. For example. So you've got a fleet that's electrifying and at the moment. There's a significant cost there, which is being spent offsite. So that tenant is fueling their vehicles, you know, at a petrol station down the road on the nearest motorway. They might sometimes have a tank on site, that's being supplied. but that cost, essentially, the landlord doesn't have anything to do with that, that sort of money that's, that's being spent. Mm-hmm. whereas you've now got this opportunity to essentially participate in that spend that's going on. Mm-hmm. And it's significant. And actually, you know, it, it varies. But if you look at the total, operational costs of, a logistics tenant in a building, the fuel piece, of that is actually around 15 to 35% is spent on fuel. And at the moment that's happening offsite and you have the potential to capture a portion of that onsite. And you know, what we would say is you're doing it in a way though that will, that will work for both you and for the tenant because actually you can provide that energy to the tenant at a cost that will be slightly less, than they'll be able to get elsewhere, or that then they might be able to get from the grid.

Adrian Strittmatter:

Was it? Well, exactly, and it is a bit like putting, you know, we're talking about onsite amenities for offices to make them desirable. This is clearly one for a logistics site.

Lorna Walker:

Absolutely. Absolutely.

Adrian Strittmatter:

So in terms of that sort of electrification of the portfolio, how prevalent or how many landlords are looking at that now?

Lorna Walker:

It's a really great question. I think where we're at now in the, there's a lot of landlords who are aware that they need to better understand energy. Mm-hmm. So I think there is some awareness that they need to better understand energy, but there's very few who have actually really started to fully embrace that and act on it and make it happen.

Adrian Strittmatter:

Is that also, because that was my sort of next question with regards to how many ways can real estate investors or owners generate sort of an NOI uplift, through energy infrastructure. Is that something maybe an, an open door as to where they can start looking or,

Lorna Walker:

Yeah, it definitely is.

Adrian Strittmatter:

definitely is. Yeah.

Lorna Walker:

and I think we think that the best way to unlock this is to help landlords understand where they can make money. Mm-hmm. And that is the easiest way to do it. And that is absolutely the approach that we've taken. And, you know, the way that we see that this is scalable is this is something that makes money and you will have, you know, a positive return on investment and it makes sense to do it from a commercial perspective. and that, and that's the lens through which they should be looking at it. I think what's important to understand as well though, is that these landlords are real estate experts. Mm-hmm. And, you know, they're great at real estate. but actually energy is very different. and you do need a different skillset. You need different experience, you need different understanding. And you also need this data piece that we've touched on is

Adrian Strittmatter:

touched on.

Lorna Walker:

you know, that there's huge amounts of data that feed into this. And you need to know, how to use that data to make the right decisions. So this is why you also need the right support to make those decisions.

Adrian Strittmatter:

And then if you, if you look across asset classes, how does that also work for, let's say, office or a resi portfolio or retail or how, how does it, how does it equate across sort of asset classes?

Lorna Walker:

So there are opportunities across all those different asset classes and across different countries. and you know, the way that we look at it from a Camion perspective is we bring in all of those different data points. And actually this is again, where actually, you know, having a platform where you can map all those data points against each other helps you to understand. you know, you're looking at a sector, you're looking at a tenant, you're looking at how much energy they're using, what time of day they're using that energy. you're looking at what the alternatives are. so there's, there's all these different data points that go in, which is why, you know, actually it can be quite difficult to say this is the specific sector where it's gonna make the most sense. because actually in different regions or sectors or building profiles, it will be different. And so that's where, you know, having, you the ability to run lots of different scenarios actually helps you to figure out where are you gonna be making the, the most money. but I think I would say you, the, there are opportunities across all of those different asset classes. but you, you are right that, you know, at the moment, for example, industrial logistics assets in the uk, it's very likely, that solar and battery storage, potentially the battery bit, is gonna make commercial sense, for both you and for your tenant.

Adrian Strittmatter:

Yeah, completely. Let's assume I'm a landlord. I have a, an extensive portfolio of properties and I, and I know that there is a, there is a huge blind spot, let's say, in my portfolio specifically relating to energy consumption. How do you help me?

Lorna Walker:

Yeah. so we, there's three main phases to what we look at, and depending on the landlord will actually depend which bit of those phases they jump in at first. Mm-hmm. so firstly there is an analysis and due diligence piece to understand what's there. Secondly is deployment of energy infrastructure. And then third is once that energy infrastructure. There's a management and optimization piece, and the reason it might depend is you might be a landlord who doesn't have any energy infrastructure, so very much for starting at phase one. but you might be a landlord that does have some energy infrastructure already. Solar panels, for example. So some of your assets will jump straight into phase three, where we're looking at that management and optimization piece. and you know what that looks like is that at that analytics phase we are bringing together all of those different data sets that we're talking about, you know, from a building level, grid level, you know, energy, market level, price of solar panels, bringing those all together. And then, on any individual building. What we then do, is we look at what are the investment targets mm-hmm. Of the landlord and of other stakeholders that are involved. for example, you know, what price is the tenant currently paying for energy? Mm-hmm. so that we can look at actually, putting that at a price that's slightly lower than what they're paying, so it makes sense for them. So we bring all these data sets together. We then run thousands of different scenarios, for any given building. and we look at, okay, so what's the optimal scenario, that lands, from that? and once we've got that optimal scenario, we're then able to dig into that with in more detail, with the landlord. and something that's also important to understand is that you, this is where the way that the platform's set up is incredibly helpful because it's a dynamic moving living object.

Adrian Strittmatter:

So if the, if the cost goes up, it remodels everything. Exactly. Yeah.

Lorna Walker:

exactly. So it might be that landlord has got a 15% IRR target, that's what it's got to hit. We run the project and you know, it only hits a 13% IRR. but we'll keep monitoring that, over time. and we might, for example, then see that the price of solar panels comes down, which is a very real thing that is happening. so we're, we're monitoring the price of solar panels coming down, and so the CapEx for that project actually is reduced. And so in six months time, actually what will happen is that the asset manager of that building will receive an email and it will say, oh, hi Sarah, the building X, Y, Z, now reaches a 15.3% IRR based on the following metrics because mm-hmm. this has changed and the solar price of solar panels has changed. so you've got this dynamic piece. so that's the, the first piece of the analytics. Then secondly is deployment.

Adrian Strittmatter:

One. One with regards to data capture, and it is just that when we are running in a different sort of on more on the branding consumer side, we have found obviously that not everyone, not every market, not every landlord, not every asset can provide the same data. How do you have, you come across times where the data has been really hard to find, and what would be those reasons or things that maybe landlords need to look at. Like what are, where would be the blind spots that you've

Lorna Walker:

Yeah. So we do, we get a real mix in terms of, the, sort of the quality of the data, that you put in. And you're absolutely right. You know, the better the data that you're putting in, then the more accurate the, you know, the output that you're gonna get. we have a lot of our own data sources, that we're able to use. So some of those things, that's what we're relying on. in any case, so the external data sources, like the prices of solar panels, battery, looking at grid, and understanding, the grid, we're able to look at, actually is there capacity nearby, if you know, or if you need to upgrade the grid connection. What's the estimated cost of, of that? where then we're looking at building data, We sometimes are able to plug in to existing data platforms, so like deep key, like scaler, like measurable. Mm-hmm. and we've got clients, who are able to provide us with access to those platforms, and we can ingest that data. And actually that is a real win for everybody. Mm-hmm. because at the moment, you know, there's data there which is largely being used for reporting purposes. and we're actually able to take that data and say, hang on, now you can make money, with this data.

Adrian Strittmatter:

useful. Yeah.

Lorna Walker:

so that, is great where we're able to bring that data in where we don't have that data. we'll use things like understanding who's the tenant, what is the, activity in the building, and we then have our own set of energy load curves. And so we'll be able to estimate, okay,

Adrian Strittmatter:

Yeah. Run models and

Lorna Walker:

that we know that it's a, you know, it's a, it's a warehouse being used by a supermarket. They've got X amount of cold storage in there. Then this is, gonna be the estimated load curve. And so we'll, assumptions. Exactly. we'll we, so we've, we've got, we've got lots of our own data sets that we can draw on where required. and then typically what happens is as you go through the process, you're then able to refine those and make them better. And actually sometimes where you've got a data gap, the best thing you can do is put something on the table in front of the tenant, for example, and say, right, we've run this, we think that you can save, you know, sort of 20,000 pounds per annum on your energy bill. and you know, we know that already hits the landlord's targets. And they will then say, oh, well actually hold on. You know, we're not paying, you know, 25 cents per kilowatt hour for our energy. We are only paying 21 pounds per kilowatt hour. We'll say, great, thanks for telling us. Now we can go away, and we'll, and we'll run the real model and we'll refine it and come back and say, okay. well his, an alternative model that actually, fits the characteristics that you've given us.

Adrian Strittmatter:

So you, so you've got, so you've done your audit, you've got your numbers, you've run your models, and then you go onto the second, onto the second

Lorna Walker:

Yeah, exactly. So the second phase is deployment. and so that's going through, yeah, refining the specification, of what you're gonna be putting on the building. It's going through a tender process. you know, it's, it's project management and oversight of that. sometimes we'll do that part ourselves. Sometimes we'll work with the landlord, or one of their, preferred partners, to do that. And we'll provide some light touch support, as part of that, in that second phase. and then once we get to the third phase, that is management of existing operational energy infrastructure. and that gets really interesting. You are. Monitoring the generation of solar, you are monitoring the consumption, by the tenants. So you're making sure, for example, that actually, you know, a very basic level that the tenant, is paying what they should be for the energy that they're using so that the energy agreement that's in place between landlord and tenant, is actually being adhered to. But you are also looking at things like, the operations and the maintenance and making sure that that's happening, as it should. And you're looking for like fault identification or, you know, anything that's going on, that's not quite as it should be. I had a, a new one to me, a week or two ago. we'd been monitoring a building and during August, which is a very sunny month, which we have also just had a very sunny month,

Adrian Strittmatter:

Yeah. No excuses there. Yeah.

Lorna Walker:

the, the generation on this building was lower than we expected it to be. It's 10 to 15% lower than what we've. We would've expected. so we spoke to the, facilities manager on the ground and it turns out that a building next door has been undergoing a massive construction project and there's dust everywhere. And so the solar panels needed to be cleaned. So we had that schedule to happen in a few months time, but actually we've expedited the cleaning of those solar panels. and so that means that actually, you know, they'll be generating more solar, in a couple of weeks time, going forward. So there's little things like that. You are optimizing for that all the time and you are also looking, for any opportunities to upsize the NEG infrastructure infrastructure as well as you go forward and, and again, as things change'cause you've got this dynamic living model.

Adrian Strittmatter:

So there's two, two sort of questions really. The first one is the scalability. How does it, you know, how does it, how do you unlock that energy value at scale across a portfolio? and then also I think going back to the asset class question, how, let's say you have a different, you have an office building. How does it work?'cause you obviously don't have, let's say, the roof structure to be able to put tons of solar panels. So assuming that you want to be able to scale, do you have different, you run different, obviously you run different scenarios by different asset classes to be able to have that sort of at scale sort of portfolio model.

Lorna Walker:

So maybe just your first question, you know, at scale. you know, this is where having, A model, which is, you know, underpinned with very strong, technological foundations comes into play and strong data science. and actually it's where we leverage ai. you know, AI is very much integrated, you know, all throughout the process. And that is what means that we can move faster and we can move at scale. And, you know, just a couple of years ago. We wouldn't have had this ability to essentially deploy AI agents who've all got different little tasks throughout the process to actually do what we're doing. And so that means that we are able to do this, at speed and at scale. I. The second part of your question, looking at, you know, different buildings that, that's part of the data that we take in. you know, we're looking at what's the roof size. We're able to estimate how much of the roof you're actually able to put solar on, and you are right, going back to that, you know, which asset classes might be typically a really good candidate for something like solar and which ones might be more challenging. You know, what you might find with, say city center, office build, you know, tall office building. if you put any solar on that roof. It will likely all be used up, which is great. Yeah. But it'll probably have to be pretty small because Yeah. The roof is probably already full of other stuff.

Adrian Strittmatter:

Well, I get like beehives.

Lorna Walker:

Yeah, like beehives. Exactly. Like beehives. Or maybe there'll be a knife, roof. Roof garden

Adrian Strittmatter:

roof gardens.

Lorna Walker:

a glass of wine

Adrian Strittmatter:

can't take away our amenities. No.

Lorna Walker:

at the sunset. Exactly. and you know, it's taking those kind of things into account and so that might mean that for a landlord across their portfolio. you know, we, we will look at, for example, okay, well which projects have maybe got the highest IRR But we might also set thresholds in that in terms of, but which ones actually, are you able to deploy a sufficient amount of capital?'cause whilst an office building might have a very high IRR, it's such a small system that that might not be a priority for them to roll out. So they might decide to prioritize different areas of their portfolio. And, but again, that's the ability of being able to actually tailor it to what's important to, you know, a, a different landowner.

Adrian Strittmatter:

And then if we, those are the internal factors over which let's assume as a landlord you have. At least control. What do you say to landlords with regards to external factors, and I think it was something that you and I discussed, like grid constraints or infrastructure not following what is the lay of the land at the moment with regards to those external factors and those external pressures?

Lorna Walker:

So I would say that those factors are only something to be worried about if you're not doing something about it. You know, it's doing your due diligence. It is understanding the space. It is taking the time to put in an application to the grid to, increase the grid connection that you've got your property. And it might be that you apply for a grid connection and the distribution network operator, the DNO, that's who you would apply to, to, upgrade your grid connection, for example. They might come back to you and say, okay, yes, the, the, and actually just as a, Point of information, they must come back to you with a date at which they can do it. So they will always be able to do it. They have to do that legally, but it might be that it's in five years time.

Adrian Strittmatter:

Okay,

Lorna Walker:

you know it's gonna be in five years time. And so actually, yes, say yes, take that good connection because if you wait until your tenant leaves in three years time. You then try and apply in three years time? Well, you'd be waiting even longer. Yeah. So

Adrian Strittmatter:

Five years is not that long. When you

Lorna Walker:

Be on the front foot. As long as you're proactive about it, then you are able to take these things into account.

Adrian Strittmatter:

which I think as you said, it's, it forms, then it is something that the landlord at the very least, can be informed about and know about, and that's where you guys come in as well. you gave a very sort of clear number. I think it was from 25 to 60% or 25 to 50% in terms of shift with regards to electrification. Is the grid ready to, to deal with such a huge uptick? Mm-hmm.

Lorna Walker:

there's a lot of infrastructure to work going on, with the grid and you know, I think that if you look at how we're gonna deal with such a big uptick, the grid is very clearly gonna be a huge part of that, but so is onsite energy.

Adrian Strittmatter:

So is on time.

Lorna Walker:

and so actually it's about looking at how do you look at these things. Together. And I think one of the things that's really helpful to understand about onsite energy is that the cost of energy is increasingly linked to the cost of distributing, that energy. and so if you have onsite energy, there's no cost of distribution once it's there. whereas the grid, The energy you're getting through that, is increasingly the cost of that is linked to the, the cost of distribution.

Adrian Strittmatter:

What's good about that then is that there's a real partnership then between the landlords and their capacity to create store, distribute internally, energy, and the grid. The grid says thank you, basically for people who come down, who come down and, and do that, that initiative as well.

Lorna Walker:

And yeah, I do think it's very much, it's a sort of collaborative

Adrian Strittmatter:

Approach. Mm-hmm. Yeah.

Lorna Walker:

to looking at this and, and I think, you know, we need to be bringing all of these solutions, to the table. And I think, yeah, that stat we're going from 20%, electric demand of the total energy demand up to 60% by 2050. And the only way we're gonna be able to respond to that is with lots of solutions.

Adrian Strittmatter:

So it's viewed as, as collaboration, as opposed to like, oh, they're competing against us in terms of energy. Yeah. Yeah. Specifically maybe diving into, and I think this would be super helpful, like a specific case study where, you know, your services were taken, strategy taken into account, and the implementation of those three processes. Can you, can you share one example that you've worked on?

Lorna Walker:

Yeah, of course. I, I would say there's lots of examples where there's no energy infrastructure at all, and there's a very clear, compelling, investment case to go forward with it. What I'm actually gonna do, I'm gonna give you an example. so this was a landlord who already had some solar on their buildings. Mm-hmm. so it was an industrial, site and there was five different buildings that had solar on them. there were assigned power purchase agreements in place, across these buildings. That's the agreement that you have between the landlord and the tenant to essentially sell that solar energy to the tenant. but the property manager in place was not an energy expert and the landlord wasn't collecting any of the revenue that they were due under, under those agreements. So they had zero revenue coming in from this solar system that was in place.

Adrian Strittmatter:

But it was in the lease.

Lorna Walker:

It was in this agreement that was in place. So it was signed exactly. So it's not the lease itself, but the, energy agreement. So it was, it was signed and so the tenants were expecting to pay for this, but it wasn't being billed. And this is because actually there wasn't anybody to go in and actually look at, okay, well how much solar is being generated and to actually monitor, well how much of that solar is the tenant using and going, into those agreements themselves and having a look. and they were slightly different agreements because. As you'd always expect that, you know, they'd been, negotiated, slightly differently. so what is the price at which we can charge them energy and, you know, what does that look like? so at a very basic level, we were able to actually go in and say, well, actually there's about, yeah, there's about a hundred grand a year here, which you are not receiving, which you should be receiving. and so we were able to come in and actually give them the information that's required so that they can actually bill, for that energy. So that was.

Adrian Strittmatter:

Do you think that's happening a lot then?

Lorna Walker:

Yes it is. Yeah. We can actually say, you know, with certainty that that is definitely happening a lot. And, I think there's a couple of different reasons for that. You know, one is, Property managers, they're real estate property managers. Great job at being a property manager, but they're not energy people. And so they've never done this and they don't necessarily have the skills, or the technology and the tools to be able to do this. And that's what was happening in this instance. and so actually, you know, you've got people who don't have the skills to do this. and then I think secondly, it's also because. There are, I'd say, a number of instances where solar has been put in place and it hasn't been seen as something that's actually a commercial opportunity. It's been put on in order to achieve a sustainability certification, which is great and I'm very happy about that. You know, one of my other hats is a trustee of UK Green Building Council, so I'm very supportive of that. But actually. To achieve that scale and adoption, you need to view it through a com commercial lens. and because one of the other things that happens there is that it means that you have, landowners or developers and they're putting solar on, and it's sized to what the planning requirements say or to what the sustainability. Certification requires, and actually, it's not being sized so that it's the appropriate amount for the tenant, looking at what the usage, is gonna

Adrian Strittmatter:

is that normally higher or lower than the, what would be

Lorna Walker:

Higher. so you, and so, and so actually, going back to this example, so the, they weren't, they weren't,

Adrian Strittmatter:

not charging

Lorna Walker:

weren't charging for this a hundred grand a year. but also the solar system itself hadn't. Really being sized properly. it should have been a bit bigger basically. but what it also meant, so we had a look at that and there was a situation where actually you could deploy, some battery storage and that was also, gonna provide a, additional commercial return, at the site. And so that, that's, that's the recommendation, that we're looking to proceed with them as well. that will also help to provide them with some uplift in value.

Adrian Strittmatter:

I mean, that's interesting, isn't it? I think that you've done these changes for certain reasons. I, I would still think even, and I, because we had a sort of a, a previous guest was a sustainability consultant as well on the premise that this is going to be a cost and not an opportunity, and that kind of negative bias Yeah. Remains, yeah. Yeah.

Lorna Walker:

No, I mean, thi this is something where absolutely you should be viewing it through the lens of it's a commercial opportunity and a chance to make money.

Adrian Strittmatter:

And so what, what needs to happen for people to, to look at it in that way. Obviously, hire you guys, but

Lorna Walker:

Well, obviously

Adrian Strittmatter:

good plug. But that's

Lorna Walker:

Adrian.

Adrian Strittmatter:

always here

Lorna Walker:

I, I do, I do think that there is like a mindset shift that we need to look at, which is actually, you know, electrification is this incredible opportunity for landlords

Adrian Strittmatter:

for everyone. In essence. Yeah.

Lorna Walker:

for everyone to make a clear commercial return.

Adrian Strittmatter:

Yeah. But super, super simply. Yeah. Is a commercial opportunity. Exactly. Yeah.

Lorna Walker:

And to approach it from that perspective. Mm-hmm. you know, and bring in the right expertise to then understand, you know, how you can roll that out and identify and, and, and I, and hopefully that will help with that mindset shift and, and will enable us to reach the scale that's required.

Adrian Strittmatter:

Okay, I think this was when we had the, the previous guest on the show as well, Georgia Elliot Smith, was that people are not viewing all these actions as at the very least, enabling business resilience. But if you try and make, or you do make the case, as you said, of commercial returns, does that not help to push the sustainability agenda as a whole?

Lorna Walker:

It absolutely does, and I'd actually say this is probably another thread in the way that, you know, I've approached this throughout my career, is that if you really want adoption and take up of sustainable solutions, you need to find a way of them being commercially

Adrian Strittmatter:

Yeah, he needs to make money.

Lorna Walker:

once, You've reached that point, that's when you get the adoption. And there's this incredible, example, that's happened in Pakistan recently where over the last eight months there has been 50% more energy added through solar, based on the existing energy load of Pakistan, that 50%, 50% more, via solar. and that's happened in eight months and it is incredible. Now, it's a sort of different setup, a lot of those very small scale. and there's been, but it's because it's suddenly made commercial sense. and there was a lot of, you know, the, the price of solar panels, you know, had, Decreased significantly. And so individuals are actually able to source these solar panels and deploy solar at such a scale. And it's amazing to see that sort of adoption and it, and I think what that helps to demonstrate is that, yeah, once you reach these tipping points, it really changes. And we've seen that in a lot of, you know, industries and sub-sectors that once you reach a, it's this positive tipping point actually. and, and I referenced the, you know, like commercial vehicles. you know, it's now cheaper to, from a lifecycle cost basis to have an electric, like commercial vehicle compared to a diesel, like commercial vehicle. And I would expect, you know, that adoption rate, to increase rapidly.'cause once you reach that point,

Adrian Strittmatter:

Yeah, definitely.

Lorna Walker:

then people take it up.

Adrian Strittmatter:

Taking, taking you back 15 years. Don't worry. It's not a bad question. Go back. Let's go back to our days at creating IMs at CBRE. Great. Which we are young

Lorna Walker:

Fun days.

Adrian Strittmatter:

Fun days. Fun days. Fun days. Asset value. So how do you feel maybe, and you've got a case study or an example. How does it affect it? So you're going, you've done worked with you guys, you've done everything you need to do. I'm not asking you to give a percentage, but like on the asset value, what would you say? You've gone through that process, you bring it out to investors now?

Lorna Walker:

Yeah, so essentially you are able to increase your net operating income at a building through adding energy revenue to a building. and so you are able to then actually capitalize that income into the future. And so I I, I'm not giving you a percentage in terms of value, but from work that we've done, We've seen that you can uplift the net operating income on an industrial logistics building from anywhere between 10 to 40% through adding the right type of energy infrastructure after building, and that's your uplifted NOI. And so that, that's what you then gonna be lifting at in terms of valuing that for the building as a whole?

Adrian Strittmatter:

So in an Im, again, you'll have your tenancy schedule and then you'll have your little graph with the

Lorna Walker:

absolutely will. Of course. Yeah.

Adrian Strittmatter:

As opposed to that ridiculous little fridge sticker, the EPC thing, you'll have a bit more, more, more data to shows

Lorna Walker:

how much, how much revenue it's making. Yeah. and, and, and, and actually this is again, though where the data comes into play and I think is really important that there is data that sits behind that that's important to understand. so we very much see that actually in that Im, that you've got. You might also be including information on how much energy did the tenant at that property consume over the last three years, five years, 10 years. And it then means that actually you've got even more confidence in how much of that energy they're gonna be using, because you've got the data to back up.

Adrian Strittmatter:

Well, and, and, and also the transition's already done. So you've got a clear pathway, especially using, as you mentioned, all the tools and the models of how that is going to develop in the future as well. Hmm. Obviously we've, we've talked about sort of the infrastructure, but if we take it out a little bit and talk about the differences between countries. We had, Tom Vaughn Fowler on a couple of weeks ago about Wiredscore and connectivity. What is it with regards to the differences of, of, I say European or global governments and their approach to this?

Lorna Walker:

Yeah. there, there is huge difference actually between countries, you know, in their governance, in their energy markets and how they function in the price of energy. and so again, that's one of the things where, It's incredibly helpful to be able to standardize all of that. And actually the AI agents come into their own, especially in terms of regulatory pieces. and, you know, understanding that. And I think going forward, that's actually gonna be incredibly important to, you know, really extract out actually what's important and what's going on. but you know, if look at. specific countries. For example, you know, in the UK we have a handful of distribution network operators who are those sort of energy providers at a regional level. in Germany, I've heard different stats. It's anywhere between 600 to 900 DNOs. and so it's incredibly fragmented. and so that can actually make it a lot more challenging,

Adrian Strittmatter:

I was gonna ask. Yeah. More

Lorna Walker:

Yeah, exactly. To to understand, and. yeah, to understand your kind of position from an energy perspective. You're not dealing, with just a few of them, like you are in the uk actually, you've got hundreds of them. and so it's much more difficult to have a standard approach, in, in terms of what you're doing. And, you know, it's also, helpful to understand that the price per kilowatt hour of energy, is really different across different countries. So in the uk, average price for, industrial logistics is, around 27.5 pence for a mid to large sized, occupier. but you know, there's other European countries where it's down as low as 15 pence per kilowatt hour. So the economics are very different. And so it's, it's something where actually understanding those differences, is really important. and, but yeah, there, there is a lot of differences between them.

Adrian Strittmatter:

Is there, a kind of a poster country or like a benchmark that, for electrification that you say, okay, they're ahead of the curve across all sort of broad brush across

Lorna Walker:

Yeah. I mean, I think you, the Scandinavian countries have done a really great job at this and actually, the way that they're deploying clean energy infrastructure on site, but also the electrification of their vehicles is way ahead. so I think you'd probably say it's. The Scandinavian countries and, and their approach. having said that, actually the UK in some senses, is actually, is actually pretty good at this. I think people might get very frustrated, sometimes at the length of time it takes to get an answer back from the DNO if they want upgrade their grid connection, for example. But the DNO has to come back to them with a timescale, and they do, and they'll give you a timescale and they give you a cost. so at least you've got some certainty, around what's sitting there and you are able to engage with them. You know, there's not too many of them as, as we talked about. and you have the ability to, you roll out your own, onsite energy infrastructure. so yeah, it's sort a bit of a mix.

Adrian Strittmatter:

we're getting to the, the end of the show. I had two last questions to turn off. the first one's quite a broad brush one, and maybe you, I think you have touched upon it, but what would you say is the biggest myth about energy infrastructure in real estate?

Lorna Walker:

So maybe I would say that the biggest myth about energy is that energy is expensive. Hmm. The reality commercial, the reality is that the delivery of energy is expensive.

Adrian Strittmatter:

Oh, okay.

Lorna Walker:

And there's a difference there

Adrian Strittmatter:

There is, yeah,

Lorna Walker:

what it means is that five years from now, onsite energy, so solar panels on a building, once it's installed, it's virtually free as an energy source.

Adrian Strittmatter:

with no delivery,

Lorna Walker:

With No delivery cost, and we are moving towards a world where energy has an incredibly low cost if it's on site, the cost is of delivering that energy to your building.

Adrian Strittmatter:

As the podcast sort of central theme is about unlocking real estate value, can you make a kind of bold prediction as to how energy will be one of the key levers that will participate in that value enhancement?

Lorna Walker:

So Onsite energy has the potential to be a real commercial driver. Mm-hmm. And so predicting, into the future. Energy and real estate are merging in what they're doing. and actually a, a great example of this is you may have seen that KKR has merged their real estate and their infrastructure divisions into one. And so actually real estate and energy are not separate things. They are becoming one. And so that mindset will change over time with a recognition that actually we need to be looking at this holistically.

Adrian Strittmatter:

As an opportunity again and not a cost.

Lorna Walker:

Yeah.

Adrian Strittmatter:

Amazing. Last words, Lorna. Thanks ever so much for coming on the show. Thank you

Lorna Walker:

for having me, Adrian. It's been

Adrian Strittmatter:

been a real pleasure. Thank you. Thanks,