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Survey by CoreNet Global and Jones Lang LaSalle shows that sustainability is increasingly critical in Asia Pacific, but sustainable space remains hard to find
Mr Wallbank, who is speaking at the CoreNet Global Summit in Macau this week, notes that while more than 40% of respondents globally were still willing to pay some rental premium to occupy a sustainable building, this is a drop from the 70% recorded in the 2007 survey.
However, Asia Pacific respondents showed a greater willingness to invest in sustainable solutions then the global average. 60% of respondents in Asia Pacific would pay up to 10% more rent to occupy a sustainable building, an increase from 55% in 2007. While only 6% would consider paying more than a 10% premium, a drop from 12% in 2007, this is still double the global average of 3%.
Asia Pacific respondents were also more willing to pay more to retrofit existing space. Globally, 50% of respondents said that they would pay up to 10% more to retrofit existing space. However, in Asia Pacific the majority (30%) would pay a premium of between 5-10% while globally the majority (33%) would pay a premium of only 1-5%. An additional 13% of respondents in Asia Pacific would consider paying a premium of over 10% to retrofit existing space.
Sustainable solutions are hard to find
“The willingness to pay more in Asia Pacific may be partly attributed to the perception that sustainable solutions are hard to find in markets that are less ‘mature’,” says Mr Wallbank. “What is interesting from the survey results is that most of the respondents have the view that sustainable solutions are increasingly hard to find across the world.”
The survey recorded a 20% increase of respondents in Asia Pacific (68%) and globally (64%) citing limited to no availability of sustainable solutions in the market in which they operate.
The availability of sustainable space for lease is not the only obstacle CRE Executives face. Over 30% of respondents gave a high rating of 4 or 5 when asked about ‘difficulty in establishing the return on investment’, ‘lack of funds to implement strategy’ and ‘different priorities in different geographies’.
Sustainability is increasingly critical
Despite the challenges, sustainability is increasingly critical to CRE executives. In Asia Pacific, 65% said that sustainability is already critical, up from 46% the previous year. This trend is consistent with the global average where the percentage of respondents who agreed that sustainability is a critical business issue today rose to 67% from 47%.
Mr Wallbank says, “In tough economic times the ability of efficiency initiatives to deliver bottom-line returns is increasingly important. We have seen that savings of up to 15% are achievable in most existing buildings, using conventional technology that is available today.”
Sustainability is a major influencer of CRE strategies and decisions in Asia Pacific
More than 400 corporate real estate executives across the globe participated in this second global sustainability survey undertaken in September and October 2008 by Jones Lang LaSalle and CoreNet Global.
Copies of the report are available at www.joneslanglasalle.com/pages/sustainabilityresearch.aspx.
Foo Chek Yee
+65 6494 3647