Sustainable building is proving to be harder to implement for small firms, as well as firms in developing regions. A recent industry survey reflected little confidence that commercial property will significantly satisfy green standards a decade from now. At the forefront of sustainability efforts is the European office sector, but government incentives are critical — especially for rehabilitating existing construction. See the following article from Property Wire for more on this.
One in five surveyors globally believe that 90% of the commercial real estate stock will still fall short of meeting good sustainable standards by 2020 without a rethink of green incentives, according to a new survey. The numbers are even starker at a regional level with nearly half, 49%, of all surveyors in Latin America believing that it will take more than a decade for even a small minority, one in ten, of the commercial real estate stock to meet good sustainable standards such as those championed by LEED and BREEAM, the Royal Institution of Chartered Surveyors commercial property agents report shows.
Despite the general view that new buildings are meeting better standards, with new stock typically representing only 1 to 2% percent of existing supply in any one year, the survey of agents highlights the immense challenges that governments face in putting idealistic real estate plans into action on a global scale, the report says.
RICS believes that an urgent rethink to incentivize the refurbishment of existing stock should be seen as a top priority over the coming decade.
The challenges appear bigger in the developing markets with agents in Africa and the Middle East, similarly pessimistic about meeting relatively modest targets within the next decade. Interestingly, agents in Emerging Asia and Emerging Europe were less pessimistic and more in line with the view in developed economies.
The survey also found that most types of occupiers are starting to implement greater measures of sustainability with regard to their real estate requirements with the biggest growth seen in the office sector, especially in Europe, ahead of industrial and the retail sector respectively. Indeed, professional firms were reported to be leading the way in terms of implementing sustainable solutions, slightly ahead of the media industry and government occupiers in the first quarter of 2010.
Agents feel that small firms of less than 50 employees are facing bigger challenges in implementing sustainable real estate solutions with this category a notable exception to the overall trend of greater implementation. This was the only category where declines in implementation were reported in the first quarter of 2010 compared to the fourth quarter of 2009.
‘The findings of the survey clearly indicate that governments worldwide have a key role to play in providing the right sort of fiscal and direct incentives to raise the quality of the real estate stock. This will send the right signals to skeptical investors who still remain concerned that the benefits of sustainable property do not outweigh the upfront investment costs,’ said Ursula Hartenberger, RICS global head of sustainability policy.
‘Crucially, developing government policies which incentivize the refurbishment of the existing stock may reap the greatest benefits in the coming decade. With mounting environmental legislation likely to affect the real estate sector worldwide, smart forward-thinking investment is simply risk-proofing the sector for the future and getting ahead of the curve,’ she added.
According to Iain Sellers of the Discovery Group in Prague, everyone publicly professes to have sustainability at the top of their agendas but this is seldom followed through in practice due to cost issues and the lack of perceived benefit. ‘Impressive Corporate and Social Responsibility pages in an annual report and on a web site are most companies’ token gesture towards sustainability,’ he said.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.