Asia Pacific cities facing shortage of sustainable office buildings: JLL

SINGAPORE (EDGEPROP) – In order to cater to the growing demand for sustainable workplaces, JLL is of the opinion that the major Asia Pacific cities must accelerate the rate of retrofitting to meet future regulations. This comes as net-zero carbon targets prompt companies to make real estate decisions that align with overall sustainability ambitions. Kamya Miglani, head of ESG research in Asia Pacific at JLL, states: “Leasing office space in green-certified office buildings is becoming non-negotiable for occupiers, but currently there is very little correlation between these certifications and a building’s energy performance. Even buildings with platinum-grade green certifications may not be NZC-ready, partly because current regulations are not stringent enough to demand NZC-ready assets.”

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JLL’s Sustainable Offices City Index, which evaluates the 20 cities in Apac on four themes, highlights that the current green building standards in the top-ranked city of Sydney are not enough to achieve a net-zero carbon-built environment. This is expected to lead to an 84% undersupply of NZC-ready office spaces by 2027. Similarly, Hong Kong and Mumbai are expected to face a 68% and 62% supply deficit of top-quality sustainable workplaces respectively. As for Singapore, a 56% undersupply of NZC-ready offices is expected by 2027, while in Melbourne and Delhi, the undersupply figure is estimated at 43% and 44% respectively.

Miglani warns that occupiers risk being stuck with limited options if they fail to plan ahead and re-evaluate the sustainability credentials of their current premises when lease expiries approach. To address this issue, governments in certain cities have taken actions, such as introducing energy performance measures, providing subsidies, or rewarding electrification of buildings and the procurement of renewable energy.

JLL believes that such initiatives, combined with corporate demand and action, can fuel the momentum and ensure a steady supply of NZC-ready office stock in the future. With over half a billion sq ft of Grade-A office space in the region built before 2011, retrofitting potential is substantial in Apac.