Corporate tenants willing to pay premium for green buildings
Survey finds demand from corporate tenants for enivronmentally sustainable buildings is outstripping supply
Almost nine of ten executives from across the commercial construction and property industry believe business tenants are willing to pay higher rents for environmentally sustainable buildings that promise reduced running costs and green kudos.
That is one of the key findings of a major survey of over 800 construction and property professionals from law firm Taylor Wessing, which found that despite the global economic downturn demand for green properties remains remarkably robust.
Speaking to BusinessGreen.com, Helen Garthwaite, head of construction and engineering at Taylor Wessing, there was now a wide industry consensus that developers investing in greener commercial buildings could generate higher returns by charging premium rents.
"Top level corporates now have policies demanding that their buildings are sustainable and at the moment the demand for those buildings is outstripping supply," she said. "These large corporate customers are driving sustainability pretty hard and property providers are beginning to respond."
The survey - which polled respondents from right across the property sector including architects, construction firms, property managers and tenants - was carried out last October suggesting that concerns about the global economy had not at that point impacted the industry's green ambitions.
Garthwaite said that since October there had been plenty of further evidence that construction and property firms would continue to support the green agenda, noting that both Barack Obama and Gordon Brown had signalled that green collar construction jobs would play a key role in their respective economic stimulus packages.
"We'd expect interest in green property to continue - the credit crunch is not putting on the brakes on this trend, it is actually catapulting it into the spotlight," said Garthwaite.
However, she added that despite evidence that the market was beginning to drive interest in sustainable construction there was still a strong case for the government to introduce more generous incentives to help drive investment in green property upgrades.
The survey showed that three quarters of respondents intended to invest in renewable energy projects in the coming years, but it also showed a lack of understanding of green property issues amongst the end users and tenants who are likely to have to foot the bill for such investments.
"The new green building rules are biting and developers and designers now have a pretty good understanding of the issues," said Garthwaite. "But tenants and investors admit to having less of an understanding and most feel more financial incentives are needed to encourage them to upgrade their existing building stock."
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