Corporate real estate forging strategies to balance people, profit and planet
Conducted in the fourth quarter of 2010, the survey results reveal a corporate real estate industry in the process of reconciling the focus on reducing environmental impacts of buildings with the need to control costs and support corporate financial performance.
"Corporations increasingly view sustainability strategies as a permanent aspect of their business, and real estate executives are key to implementing those strategies," said Michael Anderson, Manager of Research and the Knowledge Center at CoreNet Global. "The high percentage of corporate real estate executives worldwide who consider sustainability in making location decisions shows how deeply this issue is engrained in the business community."
CoreNet Global, the premier association of corporate real estate professionals worldwide, and Jones Lang LaSalle, have conducted the survey each year since 2007. Responses come from around the world, with many responses from multi-national corporate executives. Key findings of the latest survey include:
Sustainability is a critical business issue today for 64 percent of respondents, and 92 percent consider sustainability criteria in their location decisions.
The number of respondents willing to pay more for green leased space jumped from 37 percent in 2009 to 50 percent in 2010.
31 percent of corporate executives ranked employee productivity and health as their top sustainability concern, and an additional 11 percent rated employee satisfaction as the most important factor.
"The Sustainability Survey results reflect an evolution that we're seeing in the industry," said Dan Probst, Chairman of Energy and Sustainability Services at Jones Lang LaSalle. "Five years ago, a corporate real estate executive might have thought sustainability was a costly way to make the company look good to employees. Two years ago, that same executive probably focused on energy management as a way to save money in the short run. Today, he or she may be pursuing green strategies that enhance employee productivity."
Paying for green space
The jump in the percentage of respondents saying they would pay extra for green leased space may be a reflection of the more stable economic climate today than in the previous two years. An additional 23 percent said they would pay more in rent if it were offset by lower energy costs, reinforcing the idea that green space has financial benefits.
In general, corporate executives are more willing to invest in space they own than they are willing to pay extra for leased space. Most survey respondents - 57 percent - confirmed anecdotal consensus of one to three years as an acceptable payback period for energy efficiency measures in owned space. Just four percent said they expect strategies to pay for themselves the first year, while 30 percent said payback periods of three to five years may be acceptable, and nine percent would consider sustainability measures even longer payback periods.
"Although a lot of energy management strategies pay for themselves the first year, many companies have exhausted those opportunities and want to go to the next level," said Probst. "By replacing lighting systems or putting in 'smart' systems, companies may see their investment pay off within three years. A more extensive retrofit or a solar power installation usually will take longer to pay for itself, but still make sense in some situations for financial reasons, or as a way for a company to demonstrate a commitment to sustainability."