Property market facing stark sustainability choices, says JLL
PROPERTY consultancy Jones Lang LaSalle (JLL) is warning owners and developers of office stock that will need to take rapid action to protect the value of their buildings and prevent them from becoming obsolete.
Its warning is linked to legislation which will stop buildings that don’t reach a minimum green standard from being rented out.
Some 83% of property professionals think sustainability is the highest priority strategic issue facing office decision-makers over the next ten years according to JLL’s Offices 2020 research findings.
Bill Page, director, EMEA Research, at Jones Lang LaSalle, said: “From almost nowhere a decade ago, sustainability is now a key consideration for office real estate.
“Whilst environmental change, cost control and ethical business practices are all part of the equation, legislation is the real game-changer forcing European occupiers and investors to adapt their office buildings.
“A clear example of enforced change is the 2011 Energy Act in the United Kingdom. From April 2018, landlords will be unable to let out residential or business premises below a minimum standard, which is widely expected to be an Energy Performance Certificate rating lower than ‘E’. An estimated 63% of UK stock has a rating lower than ‘E’. This will force rapid change to the majority of buildings over a relatively short timeframe.”
Jonathan Carmalt, director of national office agency in the Birmingham office of Jones Lang LaSalle added: “Sustainability was once seen as a soft issue on the periphery of business strategy but this has now changed.
“A sustainable building will quite quickly become a prerequisite for prime property. Consequently, we expect the pricing gap to widen between sustainable and non-sustainable assets over the next few years.”
