Until the question of ‘value’ is fully proven can sustainable property ever really become part of the mainstream? This is a question that is continuously raised when I speak to clients or at conferences. But I am not convinced it is the right question to be asking. To be more considered and have the chance of delivering greater insight one needs to think from the standpoint of the two main constituents of the property equation – occupiers and investors.
In reality the former want to occupy the very best space for their businesses and their people within a pricing parameter that is palatable to the business. Buildings that offer their people, customers or service providers easy access; which enable their operations to be as effective as possible; which keep their running costs low and, in some cases, provide the best ‘shopfront’ to their customers and the world, would consistute ‘best’ space. On the other side of the equation, investors are ultimately seeking to own space that will be sought by established companies with a strong future, and/or buildings that offer the ability to pro-actively add value.
The desire for the most appropriate or best space is the meeting place for both groups and these requirements are increasingly and undeniably met through sustainable buildings. So why must value be continually proven? I think our industry, in its need and desire to have benchmarks, comparables and statistics struggles to absorb the reality of future tenant needs. The question of outperformance is a mask to property fundamentals, where with good space, occupier demand will prevail and the long term income streams desired by investors will be much more achievable.
And so perhaps a more appropriate question to be considered is around the challenge and recognition of future behaviourally led demand. In an industry driven by quarterly quantifiables, however, this qualitative approach remains a step too far for the great many.