A growing number of landlords are investing in creating environmentally sustainable spaces. Those who do are reaping the rewards with sustainability credentials a ‘defining factor’ in demand for the properties, according to Savills.
Figures show that sustainable spaces can command higher rates and greater occupancy levels than buildings without green credentials. But just why is sustainability so alluring? Why are tenants clamouring for more sustainable commercial spaces? And what benefits can landlords and facilities managers reap?
For tenants: lower energy costs
Harnessing green construction and factoring in energy use during the design process isn’t just a way to lower overall energy consumption and be kinder to the planet. It also lowers energy costs – meaning lower operating costs are built in, something that is incredibly attractive to tenants.
Relying on natural ventilation rather than costly traditional air conditioning for example, can dramatically reduce energy consumption and therefore, energy bills. This reduces the financial burden on the tenant in a period where energy costs and other expenses are soaring. That alone is more than enough to compel those looking for new commercial spaces to seek out sustainable options, even if that comes with a higher lease or rental cost.
For tenants: Easier staff recruitment and enhanced retention
In years gone by, working in a virally cool office with gym, arcade rooms, great cafeterias and even a hairdresser might have been the ultimate measure of success. Fuelled by the incredible campuses created by tech giants, California cool was the yardstick by which offices were measured. Today, the picture looks a little different as the more socially minded Gen Z and Millennials find their footing (and their voices) in the world of work.
Research carried out by TotalJobs has revealed the depth of feeling workers have for sustainability. 80% believe that Britain’s businesses have a responsibility to be environmentally responsible, while 50% say they wouldn’t work for a company with harmful practises. Crucially, more than a quarter (26%) would take a pay cut to swap to a more sustainably minded employer.
For younger generations, sustainability is even more of a non-negotiable. This makes a sustainable HQ a crucial asset when it comes to recruitment and retention of top talent. It can be a major competitive asset for companies navigating the great talent shortage. This is another compelling reason for businesses to prioritise greener buildings when looking to expand or recreate, and another way that landlords can position their properties as the winning choice.
For tenants: Attract investment
Companies House and the British Business Bank suggest that going green has a range of benefits. One particularly attractive benefit for tenants of greener buildings is that sustainability credentials can make it easier to attract investment. That can fuel additional business growth or power innovation.
For landlords
Each of these tenant motivators benefits facility managers and landlords, too. They all provide compelling reasons for businesses to actively seek out properties with greener technology and sustainable features, putting greener buildings in a state of higher demand.
Whether through the addition of wastewater recycling, renewable energy, natural heating and ventilation, sustainable building materials or smart technology, offering a sustainable space empowers landlords to command higher prices and ensure greater occupancy levels than older, less eco-friendly buildings.
