PROPERTY JOURNAL

The value of health and wellbeing certification for property managers and occupiers

What value does health and well-being certification offer for landlords, property managers and occupiers, and how can this be measured?

Author: Nick Hobbs

27 October 2019

Health and well-being is one of a group of new terms that have entered the property lexicon, and which now forms part of several overarching sustainability assessment tools and benchmarking standards, such as the Building Research Establishment Environmental Assessment Method (BREEAM) In-Use and the Global Real Estate Sustainability Benchmark (GRESB). Specific certification tools have also started to emerge, with the WELL Building Standard and the Fitwel system being the early leaders.

What isn't new is that health and well-being needs a business case to prove it is not just a short-lived fad. WELL and Fitwel argue that they play an important part in developing that business case; but why should the property professions take notice of them?

To explore this in more detail, we must first appreciate that many concepts identified by WELL and Fitwel are factors that most property owners, asset managers, managing agents and occupiers have been considering for years. For example, while it may not have been the norm in the past to monitor air quality in managed assets with a view to improving occupier health, no-smoking policies, air curtains and requirements for safely storing hazardous substances have existed for decades. Similarly, access to natural light and views of nature may well now be specified in healthy building certifications, but atriums and biophilic design are nothing new.

"Atriums and biophilic design are nothing new"

What Fitwel and WELL are doing effectively, however, is building on experience, collating thinking from across the property sector and learning from academia to advance existing concepts, discover new ones and generally prompt us to look at the familiar in unfamiliar ways. Here, perhaps, is the first element of a business case for health and well-being certification – it offers a way to meet the demands of the modern occupier, and to show that, as property owners or managers we are forward-looking and proactive.

Offering assurance

The value in certification for an agent such as Workman is that it increases assurance that we have considered all reasonable angles when it comes to promoting health and well-being at assets under our management. We may not be able to effect positive change in all of these areas, but where we can, we do; and where we can't, we are able to identify those gaps, formulate a reasoned response and develop potential courses of action.

Furthermore, health and well-being offers managing agents a way to start looking at the important but challenging issue of tenant engagement. Conversations around arrears, service charge budgets and leasing will always be at the core of the relationship between property manager and tenant, but the chance to start discussing innovations that benefit all involved with an asset should not be missed. It is our hope and indeed expectation that these conversations only help to develop and enhance the relationships we have with those who occupy the buildings we manage, and certification systems can help anchor such discussion.

Indirectly, tenant engagement is also a crucial part of GRESB, which has grown hugely in importance for landlords and investors in the past few years. More directly, GRESB now makes credit available for formal certifications including Fitwel and WELL; with health and well-being certification's increased importance to this benchmark, the business case for WELL and Fitwel is being strengthened for landlords and asset managers alike.

There is one important link that still needs to be developed, however, and in many people's opinion it is the most important – namely, occupier demand. One supporting argument for health and well-being in offices is that it not only helps attract tenants but also ensures satisfied occupiers, who in turn are happy to keep renewing their leases. Yet, while CBRE research from 2016 indicates that 78 per cent of millennials see workplace quality as important when choosing an employer, and 69 per cent would trade other benefits for better workplaces, the body of evidence still hasn't proved categorically that most occupiers would choose a building that is Fitwel- or WELL-rated over one that isn't. Providing evidence for this will help maintain the uptake of health and well-being certifications for office assets, and for Workman's part we are looking at ways to start monitoring this on the Fitwel projects we have undertaken or will undertake.

For all involved in commercial property management and investment, there is little doubt that the sector is moving towards greater efficiency. Improvements in energy, water and waste performance are higher up the agenda than ever, and health and well-being is the logical continuation of this, thinking on the macro scale of climate change while adding a personalised element. One of the major differences is that, while we have had decades to develop measuring and monitoring tools for electricity, gas or water consumption, health and well-being is complex, multi-faceted and still quite alien to many of us, who struggle to define it as a concept let alone know how to measure it. Rapidly evolving certification tools such as Fitwel and WELL are crucial to expand our knowledge.

"Health and well-being is complex multi-faceted and still quite alien to many of us"
Is there occupier demand?

A clear correlation between health and well-being-certified buildings and occupier demand may not have been fully established yet, but the building blocks are all in place. As the concept of health and well-being in the built environment gathers pace, WELL and Fitwel can inform decisions on where to concentrate available resource. Beyond that, as health and well-being becomes more commonplace, the need for identifying and demonstrating successes will become more and more important. Having driven growth, certification tools will then quantify that difference and help worthy assets to stand out from the crowd.

Nick Hobbs is sustainability and well-being manager at Workman LLP nick.hobbs@workman.co.uk

Related competencies include: Asset management Property management Sustainability Valuation

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