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Sunday, July 21, 2024

Sustainable Office Shortage in Mumbai and Hong Kong

Mumbai and Hong Kong, already ranking at the bottom of the Sustainable Offices City Index, are projected to experience supply deficits of 62 percent and 68 percent, respectively, in top-quality sustainable office spaces, according to a JLL report released on October 31.

Singapore, Melbourne, and Delhi are also expected to face shortages of 56 percent, 43 percent, and 44 percent, respectively, as per JLL’s findings. The report evaluated 20 cities in the Asia Pacific region across four key themes: green stock, physical risks to buildings, city competitiveness, and city administrations’ commitment to net-zero carbon (NZC) targets.

The report emphasized that occupiers are increasingly focusing on building-level sustainability metrics, including energy efficiency and green energy procurement, as they strive to meet NZC targets. Green certifications are becoming non-negotiable for office space lessees, but there’s often a lack of correlation between these certifications and a building’s actual energy performance.

JLL’s analysis calls for the Asia Pacific region to expedite retrofitting efforts to meet the growing demand for sustainable workspaces and suggests that redeveloping or upgrading assets to be NZC-ready is the most effective way to bridge the supply-demand gap.

Investors and owners are encouraged to start incremental upgrades now to gain a first-mover advantage, or risk facing penalties or reduced rental income as climate-related regulations become stricter, the report cautions.

JLL also noted that there is substantial retrofitting potential in the Asia Pacific region, with over half a billion square feet of Grade A office space constructed before 2011.

Some cities’ governments have already been taking steps to address the supply-demand gap for NZC-ready office spaces, such as Australia incorporating energy performance measures into its National Australian Built Environment Ratings System (NABERS) and the Singapore government offering subsidies to building owners for energy efficiency retrofits.

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