Green building occupiers in APAC paying rents of up to 10% more

The demand for green buildings will outpace supply in the region.

Landlords and occupiers alike have become increasingly conscious about the sustainability imperative in real estate. According to JLL, occupiers are now prioritising environmental and social responsibility by putting employee well-being first in future real estate projects. 

JLL adds, "Most major corporates have come out with sustainability pledges. The move is mainly driven by investor pressure, companies’ desire to be seen as ethical and their expectation that employees would demand green and sustainable spaces in the future."

Here's more from JLL:

A JLL survey with 478 occupiers in Asia Pacific shows that 7 in 10 are willing to pay a rental premium to lease green buildings in the future. However, the current supply of green buildings is insufficient to meet occupiers’ ambitious net zero targets. Evidences from our survey indicate the growing demand for green-certified buildings to outstrip their supply. We found that occupiers in the region would like to get almost half of their portfolios accredited by 2025, if possible. Their aspiration is unlikely to be achievable considering there is not enough supply to meet this demand.

However, occupiers are willing to pay a rental premium for leasing green buildings. We found that half of the occupiers in green-certified buildings in Asia Pacific are currently paying a premium between 4-10%.

This imbalance of demand and supply is bound to force landlords to consider refurbishing and retrofitting their buildings to meet existing and future regulatory standards and the demands of their tenants. Investors, in turn, will prioritise future investments in green-certified assets to ensure adequate supply.

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