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Top Factors Holding Back Office Landlords from Improving Sustainability

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In a new study of 250 commercial landlords with office buildings in the UK, half report major setbacks in improving energy efficiency across their portfolios, casting doubt over the sector’s short-term ability to meet net-zero ambitions. Notably, it found:

  • 49% of landlords agree it is difficult to keep up with regulations on energy efficiency standards
  • Similarly, 49% agree it is too costly to improve a commercial property’s energy efficiency
  • Even more (53%) are unsure how to effectively improve the energy efficiency of their office buildings
  • Meanwhile, 92% of landlords have either already outsourced or plan to outsource the implementation/development of sustainability policy to a third party

The findings are the latest to be revealed from a new research partnership between infinitSpace, the creator of tech-enabled, white-label, flexible workspaces, and The Instant Group, the largest global marketplace for flexible workspace solutions.

Landlords were questioned on the sustainability of their office buildings. On energy efficiency, approximately one-in-two landlords report either difficulty in keeping up with regulations (49%), the cost being too high (49%), or lacking the expertise to make effective improvements (53%). 

Although a knowledge gap was a consistent theme throughout the research, landlords demonstrated great self-awareness and readiness to meet this challenge, with 47% agreeing that they require help to shape their environmental policies.

Additionally, the study revealed that many landlords are proactively seeking to address this, with 92% having either already outsourced the implementation or development of sustainability policy to a third party (19%) or planning to do so (73%). Of those planning, 45% say they will do this in 2023 while 28% say they will do so in 2024 or beyond.

“Undoubtedly, office landlords face huge challenges in moving toward a sustainable sector. Creating energy-efficient workplaces must be at the heart of any sustainability strategy, particularly over the short term, so it is deeply concerning to see that around half of landlords report challenges with cost, changing regulations, or lack of expertise in making this crucial step,” said Wybo Wijnbergen, CEO of infinitSpace.

“Yet, landlords can hardly be blamed for these challenges. With technology, especially green tech, undergoing constant evolution and environmental benchmarks rising all the time, it is no surprise that landlords are struggling to get to grips with sustainability on their own. At the same time, their proactive response in seeking partners provides firm hope for the future of the UK office market,” added Wijnbergen.

“By partnering with a flexible workspace provider, landlords can leave the hassle of developing and implementing sustainability policies to the experts, and rest easy knowing that proposals will be presented within budget, all the while helping to boost revenues through the consistent demand for flexible workspaces,” said Wijnbergen.

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Two people working from a sustainable coworking space.

Sam Pickering, Executive Director of Sustainability at Incendium (part of The Instant Group) added: “Navigating policy changes and implementing sustainability measures is a significant challenge for the entire commercial real estate sector. Operational energy efficiency of our offices is a key contributor to global carbon emissions and implementing sustainability measures is critical to ensuring we reach net zero targets.

“Education and collaboration will be a vital component of improving the energy efficiency of our office stock, much of which runs the risk of becoming obsolete in just a couple of years. Working with a third party specialist is a logical step for landlords to take, as they can effectively develop and implement policies. Bringing greater transparency into the sector, through increased data sharing, as well as greater clarity on regulations will also help landlords in their efforts to decarbonize,” said Pickering.

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About infinitSpace

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 customised 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.

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