Green offices in short supply in Asia Pacific
Asia Pacific CBDs are substantially undersupplied with low carbon office buildings, new JLL research claims.
Large multinationals have net zero carbon commitments which are driving their occupational decisions, however Asian cities are not ready to meet this demand.
JLL’s Sustainable Offices City Index evaluates 20 cities in Asia Pacific on four metrics: green stock, physical risk to buildings, city competitiveness and city administrations’ proactiveness with NZC targets.
The index shows that not even Sydney, the region’s top-ranked city, has green building standards which can achieve a net zero carbon built environment. Sydney is expected to face an 84% undersupply of net zero carbon-ready office space by 2027.
Meanwhile, Hong Kong and Mumbai - which are placed in the bottom half of the JLL index - are expected to see a 68% and 62% supply deficit of top-quality sustainable workplaces respectively. Singapore, Melbourne and Delhi are also expected to be 56%, 43% and 44% undersupplied, respectively.
JLL argues occupiers will look beyond green certifications and make decisions based on building-level sustainability metrics, including energy efficiency and green energy procurement.
“Leasing office space in green-certified office buildings is becoming a non-negotiable for occupiers, but currently there is very little correlation between these certifications and a building’s energy performance,” says Kamya Miglani, head of ESG research, Asia Pacific, JLL.
“Even buildings with platinum grade green certifications may not be NZC-ready, partly because current regulations are not stringent enough to demand NZC-ready assets.”
JLL says the region must accelerate the rate of retrofitting to meet future regulations to meet the growing demand of sustainable workplaces. The broker says investors and owners should start incremental upgrades now or risk a “brown discount” as climate-related regulations become more stringent.
“Only a handful of office buildings in Asia Pacific match the criteria of a zero-carbon building today,” says Miglani. “The involvement of governments, coupled with corporate demand and action, will fuel the momentum and ensure a steady pipeline of NZC-ready office stock in the future.”