Office Landlords Urged To Go Green

HK Office Landlords Urged To Go Green

HONG KONG – Owners of commercial properties, particularly office buildings in the Chinese territory, should consider the sustainability of their workspaces if they want to lure quality tenants, according to an article written by Jones Lang LaSalle (JLL) that was published by the South China Morning Post (SCMP) on Tuesday noon (15 March, SGT).

“No longer merely an environmental issue, sustainability has become an investment fundamental,” wrote Andrew Lau, Energy and Sustainability Lead at JLL in Hong Kong.

“As shown by supporting data, growing market demand for sustainability in the commercial property sector is a quantifiable trend. Underscoring the value of green, evidence suggests buildings with green certifications bring in a rent premium of 6 percent, and a sales premium of 7.6 percent,” he added.

Although businesses are willing to pay a premium to rent eco-friendly office buildings, the property consultancy’s study shows that the stock of green commercial properties is presently not enough to meet the ambitious net-zero targets set by occupiers.

Meanwhile, JLL’s “Decarbonizing the Built Environment” report showed that green office leases are becoming more popular. Notably, a green lease is a deal between the landlord and tenant that ensures that the ongoing use and operation of a commercial building minimises its negative effect on the environment.

Across the world, about 34 percent of the office tenants surveyed by the property consultancy said they have already signed green lease clauses, while a further 40 percent plan to do so by 2025.

As for commercial property investors, they are also implementing eco-friendly measures, with 42 percent of those polled having put in place green lease clauses and an additional 37 percent looking to implement them by 2025.

Furthermore, among 1,000 executive leaders, property investors, and corporate tenants polled by JLL last April, 83 percent of the occupiers and 78 percent of property investors said they believe climate risk is a financial risk.

About 79 percent of office tenants expect that carbon emissions reduction will be part of their corporate sustainability strategy by 2025, while 42 percent of office occupiers think that their staff will increasingly demand green and healthy workspaces.

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