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According to a report by JLL released on October 31, Mumbai and Hong Kong, which are currently ranked lowest on the Sustainable Offices City Index, are projected to experience a 62 percent and 68 percent shortage of high-quality sustainable office spaces, respectively. Additionally, Singapore, Melbourne, and Delhi are also expected to face undersupply, with anticipated deficits of 56 percent, 43 percent, and 44 percent, respectively, as per JLL’s findings.
The Index, which assessed 20 cities in the Asia Pacific (APAC) region across four categories – green infrastructure, physical risks to buildings, urban competitiveness, and the proactive efforts of city administrations towards achieving net-zero carbon (NZC) goals, highlighted that significant cities in the Asia Pacific will encounter a scarcity of eco-friendly office spaces as businesses strive to reach their net-zero targets.
According to the report, tenants will shift their focus from merely considering green certifications and instead base their choices on building-specific sustainability criteria, such as energy efficiency and the sourcing of renewable energy, in order to meet NZC objectives.
JLL’s analysis highlights the need for the Asia Pacific (APAC) region to expedite the pace of retrofitting in order to align with forthcoming regulations and meet the increasing need for eco-friendly office spaces. The research suggests that the most effective approach to address the supply-demand disparity is to revamp or enhance properties, making them ready for net-zero carbon (NZC) standards.
Furthermore, the report encourages investors and property owners to begin making gradual improvements, such as retrofits, to gain a competitive edge as climate-related regulations become more rigorous, reducing the risk of financial penalties or rental losses.
JLL emphasized that in the Asia Pacific region, where there are more than 500 million square feet of Grade A office space constructed prior to 2011, there is significant potential for retrofitting. In certain cities, governments have taken on an essential role in addressing the shortage of office spaces ready for net-zero carbon (NZC) by implementing measures.
The report mentioned that in June of this year, Australia officially integrated an energy efficiency metric into its National Australian Built Environment Ratings System (NABERS). This metric serves as an incentive for adopting electrification in buildings and sourcing renewable energy for building operations.
Likewise, the Singapore government took steps last year to offer financial incentives to building owners. These incentives are aimed at reducing the initial capital expenses associated with energy efficiency retrofits, with the level of energy standards achieved determining the extent of the subsidies.
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