The need to keep pace with competitors is the primary factor motivating office landlords to make sustainability improvements, latest research shows.
infinitSpace, the creator of white-label, tech-enabled, flexible workspaces, and The Instant Group, the largest global marketplace for flexible workspace solutions, commissioned independent market research firm Censuswide to survey 250 commercial landlords with offices in the UK.
The survey found that 30% of office landlords have a sustainability strategy in place, while a further 42% have individual sustainability policies in place, but no overarching strategy.
The most popular reason for landlords to improve sustainability is to keep pace with their competition, with 41% of respondents citing this as a motivating factor. A personal or organizational desire to play an active role in reducing climate change was the second most common factor (37%).
Occupancy provided a backdrop to many of the factors, with 33% citing the retention of existing tenants and 28% the ability to market to new tenants.
infinitSpace and The Instant Group’s study revealed that 48% of landlords believe having strong sustainability policies is essential to attracting tenants. Indeed, 88% of landlords with office occupancy levels of more than 70% have either an overarching sustainability strategy in place (56%) or individual policies (32%) in place.
Elsewhere, 33% of landlords listed the need to comply with regulatory demands, such as new energy performance certificate (EPC) rules, as a factor motivating them to invest in sustainability.
Just one in five (19%) make sustainability improvements to lower overheads, such as energy bills. This comes despite the fact that energy costs have soared in the UK well as much of Europe over the past 15 months.
Here is the full list of factors that motivates landlords to improve the sustainability of their office buildings:
- To keep pace with competitors (41%)
- A personal/organizational desire to play an active role in reducing climate change (37%)
- To improve the retention of existing tenants (33%)
- To comply with regulatory demands, such as new EPC rules (33%)
- To act on advice and guidance from asset managers and/or brokers (30%)
- To enhance marketability to attract new tenants (28%)
- To lower overheads e.g., reduced energy bills (19%)
Wybo Wijnbergen, CEO of infinitSpace, said: “Office landlords are clearly finding “green” inspiration from a variety of places. However, it’s notable that the two greatest motivators are market competition and an ethical desire to play a role in reducing climate change, demonstrating the importance of sustainability as both a strategy for commercial success and a moral imperative.
“Many landlords will also note the connection between sustainability and occupancy. Increasingly, environmentally conscious businesses are led in their decisions by a commitment toward sustainability, including where they work. So, landlords must ensure they have a compelling sustainability strategy – with competition in the market so high, potential tenants will smell greenwashing from genuine action. Fortunately, landlords don’t have to face sustainability challenges on their own; workspace operators can help guide net-zero transformation in a way that is commercially viable both over the short and long term.”
“The range of responses illustrates just how broad and influential sustainability has become as a business driver for landlords. These results are compelling as they show landlords are still in a reactive phase of engagement. Responding to competition (41%) and compliance (33%) demonstrate this. What we are seeing through other areas of the industry is a proactive approach to yield the clear business advantages that sustainability can provide. With this shift I expect the figures for tenant attraction (28%) and greater energy efficiency (19%) will increase in prominence. The pace of change in the industry is increasing, and monitoring insights like these will continue to be hugely valuable,” said Sam Pickering, Executive Director of Sustainability at Incendium Consulting, part of the Instant Group.
infinitSpace creates and manages tech-enabled white-label flexible workspaces on behalf of commercial landlords. It aims to empower human endeavor by bringing together local communities in world-class spaces that have customized curated services and high-spec technology. It operates its own flexible workspace brand – beyond – which landlords can choose to adopt for their own buildings. Alternatively, infinitSpace can create white-label brands and technology, allowing landlords to collaborate in choosing the exact make-up of their workspace.
About Instant Group
The Instant Group has been rethinking workspace since 1999 with over 500 experts working globally across more than 175 countries. Instant’s digital platforms constitute the world’s largest digital marketplace for flexible workspace listing meeting rooms, virtual offices, flexible office space and coworking memberships. Its global team advises on commercial real estate solutions from serviced offices to fully customized managed offices, and consulting services for portfolio and net zero strategies. Instant’s approach enables agility, hybrid working solutions and improved operational resilience for more than 250,000 businesses every year. Clients include Prudential, Booking.com, Shell, Jaguar Land Rover and GSK. Instant has global offices including London, Paris, New York, Hong Kong, Singapore, and Sydney.
About the research
The market research was carried out by Censuswide between February 24 and March 4, 2023 among 250 commercial (office building) landlords in the UK. Censuswide adheres to the ESOMAR principles and complies with the Market Research Society (MRS) Code of Conduct, ensuring the highest standards of research practice and in the collection of data.