PETALING JAYA: Sustainability remains a key agenda item for corporate real estate (CRE) executives, with 70% viewing sustainability as a critical business issue today and 89% taking sustainability into consideration when making their location decisions, an increase from 76% in 2008, according to the third annual CoreNet Global and Jones Lang LaSalle global sustainability survey conducted in September and October 2009.
The survey shows an increase in the willingness to pay a premium to retrofit owned space at 74%, up from 53% in 2008. A majority of 51% are willing to pay 1% to 5% more premium compared with 33% last year and 24% are willing to consider a premium of 5% or more, up from 20% last year.
As for leased space, respondents are still reluctant to fork out premium rent for a leased green office without some form of payback. Thirty-seven per cent (same as 2008) will consider a premium of 1% to 10%, while 34% expect to pay the same and 8% expect to pay less for a sustainable space. Up to 21% of the respondents are willing to pay a premium only if the additional expenditure is offset by lower operating cost. The most important portfolio metric is energy cost, taking up 37% of the survey while 29% put employee health and productivity as the most important.
The percentage of respondents considering green building certification remains at 89% while those that “always consider” them increased to 41% from 21% last year. Jones Lang LaSalle and CoreNet Global posed a new question this year, which reveals that 90% consider energy scores or labels to be important and 46% “always consider” them in administering their portfolios.
The survey also notes that the importance being placed on building design and performance information suggests that the introduction of mandatory ratings for new developments and refurbishment (Singapore’s GreenMark and the US’ Energy Star in some US states and municipalities) and mandatory disclosure of building energy performance (Japan, Australia and the UK) appear to be welcomed by occupiers in many markets.
However, 40% ranked “the number of buildings certified” as the least important portfolio sustainability metric, which suggests that CRE executives are more focused on using green building ratings as mechanisms to evaluate and compare the sustainability of available space rather than placing green-rated buildings as a goal to achieve.
The importance of sustainability has also become a professional and personal issue for CRE executives, with 45% indicating they are “highly involved” in providing sustainability performance data. This is followed by 35% in funding sustainability-oriented investment and 30% involved in employee communication and feedback.
Respondents were also asked to rate the importance of five different aspects of their individual involvement in sustainability. Of the group, more than a third ranked each aspect as “highly important”, with the top-rated aspect being the implementation of sustainability as an expression of personal values. More than half of the respondents rate this as “highly important” and 30% giving it a medium importance.
Obtaining funds for the implementation of sustainability is the biggest challenge for CRE executives -- 67% rated it as “difficult or extremely difficult”. Other “difficult or extremely difficult” challenges are insufficient comparable industry metrics (63%), the availability of tools necessary for data collection (59%), the difficulties of the building certification process (56%) and calculating the ROI of sustainability initiatives (54%).
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