Bridging the gap: how office landlords can overcome challenges building sustainable policies

Wybo Wijnbergen, CEO of flexible workspace provider infinitSpace, explores why the office market is falling behind with ESG and shares his insight on the challenges commercial office landlords face to improve the operations of their buildings, as well as what solutions can be found to overcome such hurdles.

Related topics:  Landlords,  Commercial,  Sustainability,  Office
Wybo Wijnbergen | infinitSpace
18th April 2023
Wybo 973

The built environment is responsible for an estimated 47% of global carbon emissions; improving the energy efficiency of workplaces is therefore crucial in achieving net zero.

From ever-tightening regulations, and tougher market competition, to shifting tenant demands, commercial landlords face a variety of pressures, often in addition to personal motivation, to implement robust sustainable policies throughout their portfolios. Indeed, the widespread adoption of such policies is the only possible path to a net-zero commercial real estate sector.

Many office landlords are therefore willing and motivated to improve their sustainability practices — yet it becomes evident that this transition is by no means a simple one.

To understand the current adoption of sustainable policies in the UK office market, as well as the obstacles that hinder their implementation, in partnership with The Instant Group, infinitSpace conducted an independent survey of 250 commercial UK landlords.

Astoundingly, the survey revealed that almost half (47%) of office landlords believe that the office market is falling behind other areas of the property sector in terms of adopting sustainable policies.

Meanwhile, office landlords are facing a persistent challenge on occupancy, with 84% reporting vacancy rates of 30% and above. The good news for landlords is that sustainability and occupancy are mutually beneficial; advantageously, adopting strong sustainable policies can help to attract and retain tenants, improving occupancy and reducing operational costs.

Despite this, a fundamental question persists: why do landlords think the office market is lagging behind other sectors in this regard?

One key reason is the complexity of resolving the issue. While commercial landlords may have expertise in the property market, they likely lack the technical knowledge required to design and implement a carbon-cutting operational strategy.

The adoption of energy-efficient technology and software is crucial to reducing emissions. However, given the vast array of options as well as their continual evolution, choosing the most effective solutions can be a challenging task for landlords. Indeed, they must determine exactly which tools are best suited to their buildings, as well as those which deliver the best value for money.

Tech solutions such as sensor-controlled lighting, waste reduction plans, double glazing, paperless access platforms, and flexspace are all possibilities. It is important to note, however, that not all may be suitable for every landlord.

Funding can also be an obstacle, as the cost of implementing new sustainable measures is high not only in terms of upfront costs but also lost rental fees as changes are installed.

Setting the right targets is equally important. However, without the technical expertise to understand realistic goals, this is profoundly complex. For instance, a target to eradicate single-use plastic from operations has little meaning without a robust, strategic plan to achieve this.

Unequivocally, support is required to help shape the environmental policies that UK offices so sorely need, and landlords should not be shy in seeking such support. Naturally, the government has a role to play in helping landlords shape environmental policies by clearly outlining regulations and standards for the sector.

Additionally, landlords should take comfort in the fact that they do not have to tackle this challenge alone. Workspace operators can assist in curating robust environmental policies that attract prospective tenants while remaining within budget. With the right support from an operator, equipping workspaces with excellent sustainable policies won’t just be stress-free but also a rewarding way to make a markedly positive impact and stand apart from the crowd.

Moreover, landlords should begin to view the adoption of sustainable policies not as an additional cost but rather an investment into their future. For instance, installing double-glazing would be an upfront cost, but the energy saved from a decrease in heating usage will eventually pay for itself. These lowered costs mean that landlords can offer reduced service charges, benefiting existing tenants and attracting prospective ones.

Similarly, introducing flexible workspace may incur costs from design and management fees. Crucially, however, it has the power to increase overall floor space efficiency and meet growing market demand with a proven track record of increasing the overall value of a commercial building.

Ultimately, creating sustainable policies is a must for landlords. Partnering with a workspace provider with expertise in energy-efficient strategies can simplify and streamline otherwise challenging processes. With the climate crisis at a critical point, it is essential that office landlords take the opportunity to make environmental investments across their portfolios as soon as possible.

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