Fewer firms willing to pay extra for green space now - CoreNet/JLL

More corporate real estate executives see energy and sustainability as a business priority but are less likely to pay a premium for green office space than they were a year ago, according to a new survey conducted by CoreNet Global and Jones Lang LaSalle.

Of more than 400 CRE executives surveyed globally, 69% said sustainability is a critical business issue for their real estate departments. When CoreNet and Jones Lang LaSalle asked the same question in 2007, 47% said it was a critical issue. Furthermore, 40 percent this year rated energy and sustainability as a 'major factor' in their companies' location decisions, with an additional 36% calling it a 'tie-breaker' between locations that are otherwise competitive.

Despite the high level of importance companies place on sustainability, the number of companies willing to pay more for sustainability has dropped since 2007. Nevertheless, a significant 42% of CRE executives are still willing to pay a premium (usually 1 to 5%) to lease green space and 53% said they would pay a premium to retrofit property they own to gain sustainability benefits. In the 2007 CoreNet-Jones Lang LaSalle survey, 77% said they were willing to pay some level of premium for green space.

'The survey results reinforce the idea that corporate real estate directors are continually looking for ways to deliver greater strategic value to their organizations at a lower cost,' said Dr. Prentice Knight, CEO of CoreNet Global. 'They have climbed a steep learning curve on sustainability in the past two years, and have learned how to achieve the benefits of sustainability without overspending to get there.'

'A year ago, most CRE directors believed that improving energy efficiency and reducing carbon emissions would cost money, at least in the short run,' said Mr Wallbank. 'Today, they realise they can meet sustainability goals and save money at the same time. In tough economic times the ability of efficiency initiatives to deliver bottom-line returns is increasingly important,' Wallbank said.