SUSTAINABILITY continues to be a priority but in these tough economic times executives are less inclined to pay a premium for green office space compared to a year ago, according to a new survey by CoreNet Global and Jones Lang LaSalle.
According to the survey, the 400 global corporate real estate executives were surveyed — 69% said sustainability remains a critical business issue, up from 47% a year ago.
Furthermore, 40% this year rated energy and sustainability as a major factor in their companies’ location decisions, with an additional 36% calling it a “tie-breaker” between locations that are otherwise competitive.
However, the survey found the number of companies willing to pay more for sustainability has dropped since 2007.
Whilst 42% of CRE executives are still willing to pay a premium (usually 1 to 5%) to lease green space and 53% said they would pay a premium to retrofit property they own to gain sustainability benefits – well below the 2007 survey, where 77% said they were willing to pay some level of premium for green space.
JLL’s Asia Pacific head of energy and sustainability services Chris Wallbank said a year ago, most CRE directors believed that improving energy efficiency and reducing carbon emissions would cost money, at least in the short run.
“In tough economic times the ability of efficiency initiatives to deliver bottom-line returns is increasingly important.
“The business case for sustainable real estate development is compelling when you take into account the evolving business landscape – occupier preferences, stakeholder demands, government regulations – along with immediate cost savings,” he added.
CoreNet Global chief executive Dr. Prentice Knight said the survey reinforce the idea that corporate real estate directors are continually looking for ways to deliver greater strategic value to their organizations at a lower cost.
“They have climbed a steep learning curve on sustainability in the past two years, and have learned how to achieve the benefits of sustainability without overspending to get there,” Knight said.
Wallbank said a focus on cost-effective strategies is evident in the responses to a question on how broadly companies have implemented various green initiatives.
“Energy management, the strategy with the greatest potential for cost savings, has been broadly implemented at nearly 60% of firms and implemented on a limited basis at another 30%.
“Strategies such as purchasing green power and investing in renewable power sources, which may help the environment but offer companies less-promising cost/benefit equations are broadly implemented at less than 20% of companies,” he concluded.
Australian Property Journal