Why companies are willing to pay more to go green

The supply shortage is propelling investors to prioritise green-certified assets, with one-in-two investors indicating their willingness to invest in sustainable buildings to ensure adequate supply, according to the JLL research. 

Over 70 percent of investors believe that green certifications drive higher occupancy, rents, and tenant retention, as well as an overall higher asset value, the survey says. A LEED certification will remain the gold standard in Asia Pacific in the eyes of occupiers and investors, followed by country specific certifications such as BCA Greenmark for Singapore and NABERS for Australia.

In addition to developing new buildings that adhere to strict green standards, landlords are also looking into refurbishing and retrofitting their buildings.

Asset refurbishment and renovation is going to be the largest area of investment for real estate investors in the next three years, the JLL report says.

Other options stem from technology, such as energy monitoring or even creating entire smart buildings. In the survey, three in four occupiers and investors said insufficient technological infrastructure is a barrier to reaching environmental goals.

“Real estate is a major source of resource consumption and accounts for a large part of its global greenhouse gas emissions, which will continue providing an impetus for a change in sustainability attitudes,” says Roddy Allan, Chief Research Officer, Asia Pacific, JLL.