From 2023 all office buildings must have at least energy label C, although more than half of them do not meet this requirement. The majority of property owners believe that making their buildings more sustainable is important, but there are still too many obstacles to really make sustainability work. This is shown by the sustainability report of real estate consultant Colliers International, who conducted research on 40 institutional, private and private equity investors who together represent 6.9 million square meters of office space.
Rather cheap than sustainable
Over the past five years, investors have mainly chosen to make their properties more sustainable through regular maintenance. The sustainability strategy for the coming years is not much different. Most parties lack an ambitious plan. While institutional investors focus on optimizing their portfolio, some private equity investors are even considering ignoring the energy label C requirement. They sort out the government's non-enforcement. In addition, they expect sufficient demand from small and medium-sized businesses for office space with a poorer label. They experience that these tenants prefer to be cheap rather than sustainable.
Business case biggest obstacle
Nearly six out of ten investors indicate the difficult business case as a reason not to be more sustainable. The investments cannot often be earned back by charging a higher rent. The split-incentive problem, where the owner invests in sustainability measures and the tenant benefits from a lower energy bill, also prevents sustainability. Private investors are mainly held back by the lack of knowledge. This while the biggest challenge is mainly on their plates: making the office buildings in the less good locations more sustainable.
Joint action government, business and consumers desperately needed
Three parties can help investors make speed. Firstly, the government must enforce and give direction to the future that goes beyond 2023 by legislation. In addition, the Environmental Management Act must be extended to smaller companies so that they too can make investments that can be recouped within five years. The second party is the tenant. When every company decides to rent only sustainable office space, this makes sustainability more sustainable. Finally, employees of these companies play an important role. They can demand more from their employer when it comes to housing and thus indirectly enforce sustainability.
Ultimately, the combined effort of government, investors, tenants and employees is the best chance to get the office market more sustainable.
Rather cheap than sustainable
Over the past five years, investors have mainly chosen to make their properties more sustainable through regular maintenance. The sustainability strategy for the coming years is not much different. Most parties lack an ambitious plan. While institutional investors focus on optimizing their portfolio, some private equity investors are even considering ignoring the energy label C requirement. They sort out the government's non-enforcement. In addition, they expect sufficient demand from small and medium-sized businesses for office space with a poorer label. They experience that these tenants prefer to be cheap rather than sustainable.
Business case biggest obstacle
Nearly six out of ten investors indicate the difficult business case as a reason not to be more sustainable. The investments cannot often be earned back by charging a higher rent. The split-incentive problem, where the owner invests in sustainability measures and the tenant benefits from a lower energy bill, also prevents sustainability. Private investors are mainly held back by the lack of knowledge. This while the biggest challenge is mainly on their plates: making the office buildings in the less good locations more sustainable.
Joint action government, business and consumers desperately needed
Three parties can help investors make speed. Firstly, the government must enforce and give direction to the future that goes beyond 2023 by legislation. In addition, the Environmental Management Act must be extended to smaller companies so that they too can make investments that can be recouped within five years. The second party is the tenant. When every company decides to rent only sustainable office space, this makes sustainability more sustainable. Finally, employees of these companies play an important role. They can demand more from their employer when it comes to housing and thus indirectly enforce sustainability.
Ultimately, the combined effort of government, investors, tenants and employees is the best chance to get the office market more sustainable.
