How much firms are charged to rent green spaces
In Singapore, the premium stands between 4%-6%, JLL reported.
Singapore commands a rental premium of 4%-6% for companies that seek to rent spaces in green certified offices, JLL reported.
In its report, The Value of Sustainability: Evidence for a Green Premium in Asia, JLL found that occupiers in 11 key cities in Asia could pay a premium of up to 28% for green spaces.
“The evidence that resilient and sustainable buildings in Asia enjoy a distinct occupancy and rental premium, against their non-certified contemporaries, is now irrefutable,” Kamya Miglani, Head of ESG Research, Asia Pacific, JLL, said.
“Occupiers’ willingness to pay a premium will likely continue as society shifts towards an emphasis on green and sustainable spaces in a bid to address the concerns on climate risk and to meet company ESG demands.”
JLL found that in 14 cities in the region, 42% of Grade A office stock is green certified.
In Hong Kong, where only 29% of Grade A offices are green certified, the rental premium for LEED Platinum buildings is 28%, much higher than the 4%-6% range in Singapore where 90% of offices are already certified.
“The business case for retrofitting existing buildings is a strong one. According to our data, the office sector alone holds 333 million square metres of retrofitting potential across seven key cities in Asia Pacific – and the majority of these buildings will still operate in 30 years, hence the need to decarbonise to meet both country and tenant net zero carbon commitment between now and 2050. Retrofitting is not only the quickest and most cost effective way to accelerate decarbonisation in the built environment, it also is an opportunity for owners to meet the demand for green office spaces.” Elke Kornalijnslijper, Head of Energy and Sustainability Services, South East Asia, JLL, said.