Japan offices show benefits of sustainability, says CBRE
Green office buildings in Japan demonstrate have quantifiable benefits for owners and tenants, new CBRE research shows.
The broker’s Japan Green Building Certification Trends 2023 report says growing numbers of office buildings have green certification, such as LEED Certification, WELL Building Standard Certification, CASBEE for Buildings, DBJ Green Building Certification or others.
CBRE found that environmentally certificated properties account for 44% of total office building floor space across Japan’s 13 major cities as of Q1 2023. Tokyo and Yokohama have more than half their total office floorspace green certified.
Larger and newer buildings are more likely to have certification. While Tokyo has 52% of its office floorspace certified, only 27% of buildings have achieved a green rating.
CBRE found green buildings in Japan commanded an average rent premium of 5.4% to 6.4% over uncertified office buildings. Furthermore, since 2010, average occupancy rates have been 0.9 to 3.3 percentage points higher for green buildings.
Green buildings were also shown to have lower utilities bills as they are have been less susceptible to recent spikes in energy prices. Data from Japan real estate investment trusts (J-REITs) shows that, while utilities bills have risen 38.3% for uncertified buildings, such expenses have only risen 24.5% for green buildings.
However, CBRE also reported considerable variance between buildings and that certification does not necessarily improve performance. The report says: “Environmental certification is simply the result of owners’ and/or tenants’ commitment to reducing their environmental footprint.
“Certification alone does not automatically lead to increases in rent levels or occupancy rates. Indeed, there are some buildings that have acquired certification but which have seen no such benefits.”