Singapore Office Bldgs With Green Mark Rating Enjoy Higher Rent & Occupancy
SINGAPORE – Office buildings within the city-state’s central business district (CBD) that have received the Green Mark ratings from The Building and Construction Authority (BCA) tend to command higher office rent and occupancy, according to an article written by Cushman & Wakefield (C&W) that was published on The Edge on Friday morning (16 December, SGT).
“Occupancy rates of office buildings with Green Mark ratings are observed to hold firmer than their non-Green Mark-certified counterparts,” wrote the property consultancy’s Senior Director in Singapore Ho Chee Kit and Research Head Wong Xian Yang.
“Between Q4 2020 and Q2 2022, the average occupancy rate of office buildings in the CBD with Green Mark ratings remained at about 2 percent to 4 percent higher than that of office buildings without Green Mark ratings. Not surprisingly, office buildings with the Green Mark Platinum achieved the highest occupancy over the same period.”
As Singapore’s office sector hit rock-bottom in the middle of 2021, average occupancy levels of office properties sans Green Mark ratings fell more sharply versus those with Green Mark ratings. The better occupancy could be attributed to the robust tenant profile of eco-friendly office buildings, as such commercial properties tend to attract tenants who put a greater focus on sustainability and are generally more resilient during downturns.
In terms of rental gap, C&W compared Grade B office buildings in the CBD with Green Mark ratings and similar properties without this rating. The property consultancy’s findings indicate there’s a rental difference of about 10 percent as of the 2nd quarter of the year, and this has increased over the years.
“Within the CBD Grade A office market, Green Mark Platinum-accredited office developments are observed to command higher rents over buildings with lower ratings (Green Mark GoldPlus and Gold) on average. The rental gap rose to 11 percent in the first half of this year, given a flight to quality,” they added.
