As many as 57 percent of commercial space occupiers have already achieved green building certification and 40 percent aspire to have market recognized sustainability certification for their portfolio by 2025, a survey by JLL has said.
Two-thirds of all occupier respondents say that they are already paying a 4-10 percent premium on rents for sustainability certifications. This trend is set to continue as 92 percent of respondents are willing to pay a rental premium to take up certified office buildings, a survey by JLL titled Sustainable Real Estate: India's response to a greener future has said.
As many as 7 in 10 occupiers surveyed have carbon emission targets as part of their corporate sustainability strategy; the same number is willing to pay a premium to lease green-certified buildings.
Sustainability has gone mainstream for commercial space occupiers in India and as many as 87 percent occupiers surveyed said that the link between CRE (Corporate Real Estate) and sustainability is a board-level agenda, and 81 percent said that real estate is a game-changer in achieving the sustainability agenda.
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As many as 7 in 10 occupiers surveyed have carbon emission targets as part of their corporate sustainability strategy, the survey said, adding that 65 percent of corporate occupiers and 50 percent of polled investors have already incorporated carbon emissions reduction as part of their enterprise sustainability strategy.
As many as 87 percent occupiers in the Pan India survey and 78 percent of the investors accept that ‘climate risk poses a financial risk’. Occupiers in India are ahead of investors on sustainability ambitions, with the majority of occupiers, 82 percent, either leading or on the path, against 66 percent of investors.
As many as 7 in 10 occupiers surveyed have carbon emission targets as part of their corporate sustainability strategy. The need for a more sustainable environment has led to greater demand for green buildings, so much so that demand for green buildings risks outstripping supply in India today, it said.
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The same number of occupiers are willing to pay a premium to lease green-certified buildings. Due to the higher demand for green buildings, retrofitting today presents the biggest challenge and opportunity, it said.
Half of the landlords (5 in 10 ) want to actively undertake retrofitting and adaptation for building lifespan extension. However, the need of the hour is a partner ecosystem to accelerate the race to net zero. The majority (9 in 10) surveyed believed that a strong partnership among cities, investors, and occupiers is necessary and closing the technology and data gap will be crucial.
As many as 9 in 10 agree that digital solutions will be critical in achieving sustainability goals.
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“Sustainable future in general and ambitious net-zero commitments in particular cannot be achieved without the ecosystem coming together with a collaborative approach. 96 percent of stakeholders in the research survey agree that collaboration among policy influencers, investors, developers, and occupiers will be instrumental in achieving these ambitions. It is not surprising hence, that sustainability has gone mainstream, and real estate is at the core of it. 90 percent of respondents of our survey believe that the link between CRE and sustainability is a board-level agenda,” said Sandeep Sethi, Managing Director –Work Dynamics, West Asia, JLL
“India has a big road ahead to be net-zero carbon by 2070 and will need to start with smaller steps. With corporates already committing to aggressive zero-emission targets within the next decade, the built environment will need to keep pace. Investments in technology to measure and accurately report emissions will be as critical as defining clear achievable goals within specified timelines,” said Samantak Das, chief economist and head of research and REIS, India, JLL.
“Employees will significantly drive the corporate sustainability agenda by pushing for greater participation and clearly wanting to work for firms that establish their credentials as responsible leaders. The push from employees will further create the right motivation for employers and asset owners to introduce sustainability features if they want to remain relevant while creating asset enhancement opportunities,” he added
The report noted that a significant opportunity lies in tackling the carbon emissions from real estate, whether owned or leased. Recognition of this fact is clear given that 96 percent of occupiers agree that real estate is a game-changer in achieving the net-zero carbon agenda.
Furthermore, for 77 percent of occupiers, carbon emissions reduction is specifically part of their real estate strategy. A majority of occupiers (93 percent) agree that they will proactively prioritise locations that help them reduce carbon emissions in the future and investors (65 percent)agree that they would prioritise investing in cities that are climate change progressive.
This validates the belief held by investors that green certifications drive higher occupancy, higher rents, higher tenant retention, and overall higher value for the asset. As a result, when building or buying assets, investors prioritise buildings with green certification. LEED (Gold level) certification is most sought after in India, the survey found.
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