Proptech venture capital firm Pi Labs has opened in Hong Kong and appointed Akina Ho to lead its Asia business.
Ho was co-founder of the Hong Kong Proptech Alliance, where she is an adviser, as well as an adjunct professor at Hong Kong University of Science & Technology. She was previously head of digital transformation and innovation at listed real estate company Great Eagle Holdings.
Pi Labs said its new presence in Asia had been driven by its increasingly global investor network and their growing requirements for specialist proptech investment expertise in the region.
Ho said: “With Pi Labs’ expansion into Asia, it will allow investors to have access to deep tech startups that help to digitalise and decarbonise the built world. As proptech in Asia is moving seriously towards a more ESG-focused strategic direction, it is perfect timing for Pi Labs to enter Asia.”
Pi Labs founder Faisal Butt said: “Hong Kong is a key gateway to Asia and benefits from progressive real estate developers already taking bold steps to deploy the latest technology into the built world. We already have partners in Hong Kong including household names such as Swire Properties and continue to have meaningful discussions with world-class capital partners who are searching for the connectivity, deep industry knowledge, and investment expertise we have in built environment technology.”
Asian office occupiers demanding green buildings but are unwilling to pay a premium for them, a new survey from CBRE found.
The broker’s 2023 Asia Pacific Office Occupier Sentiment Survey, which questioned 130 corporate real estate executives in 80 companies, found that 64% of office occupiers want to increase their use of ESG-certified buildings.
However, only 23% were prepared to pay a premium for environmentally sustainable space and, of these, only 10% were prepared to pay a premium of more than 10%. Nearly two-thirds said they would not pay more than 5%.
CBRE suggests the result is partially because so many Grade A offices in the region are already green certified, 43% in 2022. This means green certification is already becoming the norm for Grade A offices in some markets.
Consequently, the “green premium” is much stronger in markets where the stock of green certified buildings is lower. For example a rental premium of 15-25% might be achieved in Shenzhen or Guangzhou, says CBRE. In leading markets for green certification, such as Singapore and Australia, the premium might only be 2-8%.
The report suggests that a “brown discount” for non-certified buildings will become more apparent as green certification becomes standard for Grade A office buildings.
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.”
JLL hopes rising energy costs and awareness of sustainability will drive developers to build greener apartment blocks.
Only 15 private housing estates in Hong Kong have been awarded BEAM Plus Platinum ratings, JLL found, including Swire Properties' luxury Alassio development, pictured above.
The broker’s property management arm claims IoT sensors and AI analytics can save 8-10% on energy costs. JLL also says green residential units can attract higher prices when resold.
Norry Lee, senior director of projects strategy and consultancy at JLL in Hong Kong, said: "We have not seen a trend to build green residential projects in Hong Kong and it is not a major selling point for developers launching the new projects.
“However, numerous studies have shown that green residential units have a resale premium of approximately 5-10% compared to conventional ones in many cities. As such, we believe the demand for green housing will rise when the awareness of sustainability increases.”
Hong Kong lenders will offer bonuses for homebuyers purchasing apartments in high sustainability-rated buildings, however the terms are not significantly attractive, with cashback of 0.2% of loan value being typical.
Cathie Chung, senior director of research at JLL in Hong Kong, said: "There is a clear need for increased awareness of green homes. The government can play a significant role in promoting awareness by educating the general public on the virtues of green homes and implementing measures to improve the attractiveness of green building development, such as providing more GFA concessions and tax incentives to certified projects.”
Cushman & Wakefield has appointed Mika Kania as director, sustainability & ESG, Asia Pacific.
She joins from JLL and has previously worked for WeWork in China and for the US Green Building Council (USGBC). In her role at the USGBC, Kania played a key role in expanding the presence of LEED within Asia Pacific.
Based in Hong Kong, Kania will report to Matt Clifford, head of sustainability & ESG, Asia Pacific.
She said: “Asia Pacific is a tremendously diverse region, and this diversity is reflected within the Net Zero aspirations of the different markets. I’m excited to partner with global and regional clients to help them develop cohesive, practical strategies for achieving carbon reduction improvements across their portfolios.”
ESR Group has opened a Japan logistics centre with features designed to boost staff wellbeing.
The ESR Higashi Ogishima Distribution Centre is a nine-storey, 349,000 sq m logistics facility in Tokyo, located approximately 10km from Haneda Airport.
The project incorporates a number of amenities for workers which are unusual for logistics facilities, such as a free day care centre, outdoor green space and a number of recreational spaces, such as a bowling alley.
Warehousing tenants in Japan increasingly look for such amenities in order to attract and retain staff and to boost wellness and productivity.
The facility has also achieved CASBEE S rank and BELS five stars accreditation. ESR plans to install 2.5MW of solar PV panels to the building.
Link REIT has launched a sustainability education and collaboration centre.
The Hong Kong real estate investment trust’s Link Sustainability Lab, a 6,800 sq ft venue in Lok Fu Place, Kowloon, aims to integrate the best practices of sustainability into people's everyday life and business operations.
Link chairman Nicholas Allen said: "In this easily accessible Lab, Link will illustrate how the long-term vision of sustainability can be broken down into many actionable pathways and achievable smaller goals. By making sustainability accessible, actionable and achievable, Link hopes to popularise sustainability knowledge and demonstrate that sustainability can be adopted by everyone in the community as a viable lifestyle and business model."
The first exhibition is a called Take Eat Seriously and explores the connection between the modern food system and people’s daily lives. It also features a sustainable Cha Chaan Teng (traditional Hong Kong café) demonstration unit to how a traditional F&B operation can be made sustainable through multiple small changes.
Embassy Office Parks REIT has launched a plan to spend more than $35 million on sustainability initiatives.
The Indian real estate investment trust has committed INR3 billion ($36.4 million) to double its solar energy capacity to 240MW of on and offsite power. Last week it launched a 20MW rooftop solar project as part of this programme.
The REIT, which owns office properties in Mumbai, Delhi, Bangalore and Pune, aims to achieve 75% renewable energy usage by 2025 as part of its commitment to hit net zero carbon in operations by 2040.
CEO Vikaash Khdloya said: “Keeping sustainability as a core focus, we continue to deliver and operate world-class, wellness-oriented workspaces for our occupiers and their employees.”
Hang Lung Properties and LVMH Group have launched a new sustainability partnership for China.
The Hong Kong developer and the French luxury goods group will collaborate for three years on climate and sustainability measures, they announced this week. LVMH brands occupy more than 27,000 square metres across Hang Lung properties in seven Chinese cities.
The duo will focus on five key areas: climate resilience, resource management, wellbeing, sustainable transactions and sustainability communication, events and progress reviews.
Hang Lung said the agreement “reimagines the relationship between property owners and leading retail brands on sustainability”.
Adriel Chan, Hang Lung vice chair and chair of sustainability steering committee, said: "Although Hang Lung already has ambitious ESG goals and targets, the partnership with LVMH takes our sustainability agenda to the next level, demonstrating how landlords and tenants can work creatively together for the greater good.
“Hang Lung and LVMH have made explicit in our agreement that we encourage one another to work with other tenants and other landlords to further the sustainability agenda, and so we welcome the proliferation of these types of agreements going forward."
Sustainability conference ReThink HK returns to the city on October 5th-6th at the Hong Kong Convention and Exhibition Centre.
In its third year, the event aims to help businesses accelerate their transformation towards a more sustainable future. It features a number of speakers from the real estate industry and a “Rethinking Built Spaces” programme, focusing on the built environment.
Sustain will be reporting from the conference next week so look out for news and interviews.
See https://rethink-event.com for more information.