6 in 10 HK firms willing to pay higher rent for green buildings

Those leasing green buildings pay a rental premium of 1% to 7%.

62% of corporations in Hong Kong are willing to pay rental premiums to lease sustainability-certified buildings as part of sustainability initiatives, according to JLL.

According to the Asia Pacific Sustainable Real Estate: From ambitions to actions report, 39% of corporate occupiers in Hong Kong have already adopted net-zero targets, whilst another 29% are planning to adopt by 2025.

The majority of tenants leasing space in sustainability-certified buildings are paying a rental premium of 1% to 7%, it said.

JLL said there is also an increase in enquiries it received in the first half on net-zero carbon which signifies that Hong Kong firms are adopting sustainability initiatives.

Of the 550 corporate real estate leaders surveyed in the report, JLL found that 90% of companies in the region agree that discussing emissions from real estate is important in achieving a net-zero carbon agenda.

In the Asia Pacific region, 70% of corporations also agree to pay higher rents for green buildings. It also said that 40% of corporate occupiers in the region have adopted net-zero targets, whilst 40% more are planning to commit by 2025.

It also said that the regional real estate decarbonisation initiatives are prompting 80% of corporations to prioritise locations that will help reduce carbon emissions and 65% of investors will focus more on green building investments.

“For companies operating in the Asia Pacific, any meaningful reduction in carbon footprint is tied directly to real estate. Corporate occupiers will increasingly demand real estate solutions that complement their sustainability agenda. This will lead investors to prioritise green investments, propelling the real estate industry transformation towards future-ready green buildings,” said Anthony Couse, JLL CEO in APAC.

The survey also found that only 21% of corporate occupiers and 26% of investors were identified as “leading” in their sustainability, indicating that more organisations have to do more to put their commitments into action.

70% of the corporations report a lack of government incentives or support from their landlords for their sustainability goals, whilst three in four companies cited insufficient technological infrastructures as a stumbling block in achieving their goals.