Sustainability and value in the regions
Pressure to achieve sustainability targets continues to grow
- Elaine Rossall
- Barrie David
- Vicky Heath
Sustainability has become a mainstream issue within the real estate sector over the past few years. It will become even more fundamental to delivering office space, as we all move closer to net-zero deadlines following on from COP26 which saw ESG rise in importance.
Mindsets are changing fast, with companies also facing growing pressures from their stakeholders to embed sustainability at the core of their business strategies.
As a result of these pressures, there’s already a wave of occupiers waiting for net-zero carbon and sustainable buildings. Those companies continue to declare a climate emergency and continue to publish their ambitions to be net-zero carbon. The number of companies signing up publicly to sustainability targets has grown exponentially over the last three years.
Over the last 24 months, the momentum has been building for companies based in regional cities. It’s grown in terms of both the number of companies and the footprint occupied. Space occupied by companies signed up to science-based targets (SBT) more than tripled between 2018 and 2020 to stand at around 4.4 million sq. ft or 3% of the total office stock.
The concern is that this target could result in stranded assets within the next 10 years, as 2030 is effectively just one property cycle away.
Supply is failing to keep pace with demand. We estimate that just 16% of built office stock in the Core 8 has a Good to Outstanding BREEAM rating and there are no net-zero carbon buildings available in the Core 8 that meet the UKGBCs framework for both embodied and operational carbon.
JLL analysis shows that more sustainable offices tend to achieve higher rents and faster leasing velocity across the Core 8.
If you would like to read more details on the research, including insights from regional owners and developers of offices, please complete the form below to download the sustainability and value in the regions report.