The demand for green-certified buildings has increased over the past 12 months, according to the survey, but the shift in mindset is slow – more so for occupiers. Globally, 38% of respondents believe that occupier demand has increased moderately, and only 3.4% significantly. Meanwhile, 48% of respondents believe investor demand has risen – 8.3% significantly. However, almost the same number (47%) believe there has been no change at all in demand.
With the exception of Europe, there are currently no markets in which the majority of respondents believe green-certified buildings command a rent premium over comparable non-green buildings. The picture for investment is more positive, with a majority of repsondents in all regions beleiving there is a price premium. Typical premiums for green buildings are, in most cases, no more than 10%.
For all the expressions of commitment to ESG goals, it appears that many investors are still talking the talk, rather than walking the walk. Most respondents (64%) believe investors’ underlying decisions are still based on traditional cost considerations.
Tellingly, although countries such as China and the US are showing some leadership in this area, less than 10% of respondents in the UK, Japan and Hong Kong – all mature real estate markets – believe that investors are favouring projects with high ESG ratings.
Attitudes to building-in resilience to extreme weather are somewhat mixed. Respondents across Asia Pacific, the Middle East and Africa – regions more susceptible to a range of extreme weather events – believe it to be of greater importance.
But this level of importance drops when applying only to repair or retrofit projects. More than one-third of all respondents consider it unimportant, compared with the 27% who believe it’s unimportant on new builds.
It appears that attitudes to sustainable construction practices also have considerable room for improvement. Circular economy principles are not particularly widespread, with only 15% of materials and components costs comprised of recyclable or re-useable materials. Furthermore, a sizeable share of respondents indicate that demand for such materials hasn't risen all that much in the past 12 months. Across the Americas, for instance, almost 60% report that demand remains unchanged.
Finally, almost two-thirds of professionals globally are not measuring carbon on projects. And even where it is being measured, it is having little impact on the choice of materials being used. Around 19% of respondents claim to be measuring carbon but that it's not substantially affecting the choice of materials. And only 18% say that embodied and operational carbon is both measured across projects and that it also significantly affects the choice of materials.
For further analysis of the survey, Paul Bagust, RICS Global Property Standards Director, discusses what the implications of the findings are, and how the profession responds, in this article.