Sustainability is now a ‘top consideration’ for businesses looking for spaces to lease, according to real estate firm JLL, with would-be tenants even prepared to pay a ‘green premium’.
This premium is as much as 7.7% across eight eight major cities in North America, 9.9% across nine cities in Asia Pacific and 11.6% in London.
According to JLL, low carbon, high quality spaces are in high demand from many firms, even as the office leasing market remains ‘subdued’.
Emissions reduction
“The buildings companies occupy are typically part of their scope 1 and scope 2 emissions, which means is essential for them to address this in their real estate strategies to help achieve their targets and comply with reporting legislation,” commented Kirsty Draper, Head of Sustainability, UK Agency at JLL.
“Even though for many companies, their workplaces are just a small part of the overall carbon footprint, they’re also an important reflection of their sustainability commitments to the outside world.”
JLL cites the example of Spanish bank BBVA, which is planning to relocate its New York headquarters to Two Manhattan West in Hudson Yards, a facility that sources 100% of its electricity from hydropower from the neighbouring Hudson River.
In terms of the sustainability criteria sought by businesses when seeking new spaces to lease, buildings that are certified sustainable – through LEED and BREEAM – is top of mind, as are premises that boast a low energy use intensity (EUI).
Supporting sustainable commutes is also high on the agenda, as is compliance with local level regulations, and landlords that are prepared to collaborate on communication as well as sharing costs and benefits.
Access to green space and amenities that support wellbeing are also among the criteria being sought by businesses, according to JLL.
Sustainable expectations
“Expectations around sustainable buildings are growing at a time when companies are also downsizing and opting for higher quality spaces,” added Jaime del Alamo, ESG Value & Risk Vice President at JLL.
“Together with an increasing number of incoming regulations, more companies signing up to stringent carbon goals such as the Science Based Targets initiative (SBTi), and higher pressure to decarbonise from shareholders, a building’s sustainability credentials will come under increasing scrutiny.”
