Report: Green offices fetch higher rents from corporate companies

Green offices fetch higher rents from corporate companies

More companies are prioritising sustainability in their operations, willingly paying higher rent for more sustainable office spaces, finds new report from CIM.

The report, Tenant Preferences in the UK Office Market, polled 200 UK directors and upper management from businesses that were significant renters of office space. These individuals were also the key decision makers.

After the pandemic, the majority of respondents expect hybrid working to remain ‘the norm’, found the study. Almost three quarters of those surveyed (72 per cent) expect businesses to run at least three in-office days a week over the next two years, working from home for the remainder. This means that offices must also keep up with EPC target deadlines if they want to remain lettable.

Landlords must keep pace with office mindset shift

According to the report, employees’ attitudes towards office spaces are shifting and landlords must keep up. Only 39 percent of respondents were ‘very satisfied’ with their office space, pointing to lack in landlord responsiveness.

While 6 per cent of respondents were unwilling to pay higher rents for green office spaces, almost half (41 per cent) stated that they would pay between 10-14 per cent more for a sustainable working space. The environmental performance and general sustainability of a facility were also mentioned by 49% of respondents as factors that would ‘very much’ impact their choice of workplace.

Cillian Casey, Regional Vice-President EMEA and US at CIM, said, “Factors such as the rise of hybrid working and soaring energy costs, for example, are now greatly influencing what decision-makers want from a building. With more emphasis being placed on how companies can attract employees back to the workplace, environmentally friendly offices that improve productivity and wellbeing are now expected.”   

Higher expectations expressed for net zero goals

Nearly all respondents (55 per cent) ‘expected’ to see landlord proof of a building’s attempts to achieve net zero. This is consistent with other concerns mentioned in the survey, such that 53 per cent of decision-makers said that lowering ongoing operations and energy costs will have a big impact on their choice of office space. As building maintenance costs are expected to rise by 5.7 per cent in Q4 of 2023, streamlining energy management is more important than ever.

Casey added: “Creating and maintaining more efficient buildings is critical to improving the overall standard of the built environment and meeting shifting market demands. However, while businesses are enthusiastically embracing sustainability, they need technologies that actively improve building performance – especially given the continued volatility in energy pricing.”

Priva is a leading manufacturer of building energy management systems and digital cloud-based building automation technologies. To find out more about the role Priva’s technologies play delivering more sustainable building operation, head over to our blog – or drop us a line.

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