Investment Property Forum
Total grant value: £49,500
Time duration: 2007-2008
The research set out to examine the extent of demand for sustainable offices in the UK by examining actual moves made over a two year period (2006-2008), and, in addressing this key theme, posed a number of related questions which included:
- What has driven the decision to occupy a particular office property from drawing up the agent's brief through to final selection?
- What aspects of sustainability were most important in the final decision to occupy the final choice of office?
- Which sustainability features tend to be most common in the final choice of office building?
- What might be influencing the importance of sustainability in the decision to make the final selection of the office (i.e. sector, timing of move, for example)?
- To what extent are occupiers assessing the business/financial case for sustainability, and what is the evidence on actual costs?
- What are the key drivers and barriers which are impacting on the overall market for sustainable office space?
- How is sustainability linked with company culture, corporate responsibility and environmental policy?
- What are the critical success factors which make for a successful and sustainable office project (from both the investment and occupier points of view)?
The research examined the reasons behind actual office moves made within the previous two years, and assesses the extent to which sustainability played a role in the final choice of office building. The research is important because, for the first time, it analyses actual occupier moves, or choices, in relation to sustainability, rather than 'preferred' or 'hypothetical' choices.
Some 50 interviews were conducted with senior decision makers in private sector companies in a range of business sectors. The total UK floorspace taken within office buildings in the telephone survey represents some 2.53m sq ft of floorspace (leased and owner occupied), equivalent to about 5% of the total UK floorspace held by respondents. The sample was split fairly evenly between new build and refurbished properties.
These interviews were then supported by a further 37 face-to-face interviews with key stakeholders (including members of the office project teams and employees) in five case study buildings which were also in the telephone sample, and were located in London (three buildings), Southampton (one building) and Coventry (one building).
All the interviews for the project were carried out during April to November 2008 and covered moves made within the previous two years or moves which were imminent.
The research suggests that there is an emerging and increasing demand for sustainable offices, but location, availability of stock and other factors continue to remain more important in determining occupiers' final choice of office. The main findings showed that:
- Sustainability (as represented by explicit sustainability features in a building) is less important than location, availability of suitable stock, overall building quality and other factors in the final choice of office, but has become relatively more important in moves made over the last 12 months, or moves which were imminent.
- The most common sustainability features in office buildings are flexible space, efficient energy and utilities, effective monitoring systems, and sustainable waste and water systems.
- Occupiers who moved to a BREEAM building, and were based in business sectors with strong environmental / corporate responsibility policies, place more emphasis on sustainability than other groups in the final choice of office, but 'location' and 'availability' remained paramount.
- Nearly one third of respondents had specified minimum levels of environmental performance in the agent's brief, but only three mentioned sustainability explicitly. The vast majority of those that had specified environmental standards tended to move to BREEAM-rated offices.
- Committed occupiers are likely to find and select office buildings with a greater number of sustainability features present, despite competition for such space, and a perception of market undersupply by occupiers.
- Some 42% of respondents suggested that they had assessed the business and financial case for sustainability, but the perceived, additional costs of sustainability remains a key barrier for occupiers.
- Organisational change is a key driver in the market for sustainable offices: occupiers want buildings which can help them achieve cultural change and encourage more sustainable practices, and the key benefits of such buildings include a better public image, improved client relations, and improved employee retention.
Dixon, T., Ennis-Reynolds, G., Roberts, C., and Sims, S. (2009) Demand for Sustainable Offices in the UK (full report and summary report), Investment Property Forum
Dixon T., Ennis-Reynolds, G., Roberts, C., Sims, S. (2009-forthcoming) 'Is there a demand for sustainable offices? An analysis of UK business occupier moves (2006-2008)', Journal of Property Research
Press release on research
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