Commercial landlords can profit from increasing demand for green buildings

Industry comment

Published: 26 April

Author: Alan O'Brien

Type: Industry comment

Year: 2010

  • Landlords stand to gain from new eco trend in commercial property
  • Growing evidence that clients are prepared to pay higher rents for energy efficient buildings
  • Sabien Technology provides cost effective solutions for landlords to reduce their energy bills and benefit from green rental premiums

 

Landlords are set to reap dividends by making commercial property more energy efficient thanks to growing evidence that clients are prepared to pay higher rents for green buildings, according to energy efficient technology specialists Sabien Technology.

The long-established US trend for buildings with a good energy rating to attract a higher rental income than buildings with a lower rating has started to take hold in the UK.

Commercial clients are demanding that their buildings achieve 'Excellent' or 'Outstanding' BREEAM environmental performance ratings due to an increasing emphasis on environmental awareness and corporate social responsibility.

“There is growing evidence that clients are prepared to pay higher rents for energy efficient buildings in the UK, as we have seen happening for many years in the US,” said Alan O’Brien, CEO of green tech company Sabien Technology.

“By going green and future proofing buildings, owners can enhance yields and improve occupancy rates. Over the life cycle of a green building the savings can also offset a higher initial outlay and result in low, or even negative, carbon reduction costs.”

“Tenants are attracted to green buildings as they see sustainability as an important product differentiator in the marketplace. Locating their businesses in energy efficient premises reflects well on the image of their firm and creates goodwill among clients and customers,” O’Brien continued.

This trend comes as good news for landlords, who are already under pressure to improve the energy efficiency of their buildings under government initiatives like the Carbon Reduction Commitment energy efficiency scheme (CRC).

“In the long term, buildings which perform poorly in terms of sustainability and energy efficiency will become less attractive to occupiers as the government introduces penalties to encourage energy efficiency and increased sustainability,” O’Brien added.

“There is growing evidence that sustainable buildings make good business sense. As well as commanding higher rental incomes, other benefits include higher demand from institutional investors and lower maintenance and operating costs.

“Landlords don’t have to spend a fortune on sustainable technology to benefit from green rental premiums. Sabien’s unique M2G technology provides a proven, cost-effective way to reduce carbon emissions and energy bills.

“Sabien’s M2G boiler load optimisation control can work out when and how boilers are working inefficiently and can make adjustments that can cut energy consumption and carbon emissions by up to 25%,” O’Brien said.