Most tenants won't pay more for green leases
LONDON (Reuters) - About two-thirds of global corporates are not prepared to pay higher rents to take space at "green" buildings, even though 70 percent of them view sustainability as a critical business issue, a survey showed.
The third annual sustainability survey by trade body CoreNet Global and consultant Jones Lang LaSalle, showed more companies were considering the environmental impact of their lettings contracts but only a minority were prepared to shell out more cash to make a greener choice.
"It is no longer enough to simply be 'green' - organisations want to see the benefits to the bottom line," said Dan Probst, chairman of Energy and Sustainability at Jones Lang LaSalle.
Some 37 percent of the 231 corporates surveyed said they would consider paying a premium of between 1 and 10 percent on green rents, while one-fifth of respondents said they would only pay more if this was offset by lower building operating costs.
Just one in 10 respondents said they did not consider sustainability criteria in making leasing decisions, while about two-fifths of occupiers said they always looked for green building certifications such as LEED, BREEAM and Green Star when choosing new premises.
The survey suggested companies were continuing to focus on strategies that were easy to implement and provided short-term cost savings, such as energy efficiency programmes and waste recycling.
Two-thirds of respondents described obtaining funds to implement sustainability strategies as a "difficult" or "extremely difficult" challenge, although nearly three-quarters said they would be willing to invest in refurbishing their owned assets to hit sustainability targets.
"The findings of this survey provide stronger evidence than ever that sustainability concerns are impacting on corporate real estate decision-making," said Julie Hirigoyen, lead director of Jones Lang LaSalle Sustainability Services.
"As this message filters through the markets, we may begin to see signs of a two-tier market emerging whereby buildings that do not meet certain sustainability standards incur higher rates of depreciation and obsolescence," she said. Continued...
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