CBRE: Most investment deals in the office segment in Romania involve green office
The stock of "green" offices is significantly higher in Romania than anywhere else in Europe, taking into account that 70% of office buildings have green certifications and 85% of workspaces are, in turn, qualified as sustainable, CBRE said.
According to the company's data, last year, 88% of investment deals in the office segment in Romania involved buildings with green certifications. This makes the office sector the most representative when it comes to buildings with sustainability standards, followed by logistics and retail.
"We see a clear trend in Europe of tenants being very interested and willing to pay a higher rent for environmentally friendly premises. This can range from just 10% to almost 30% in Copenhagen, Barcelona or Amsterdam. In Romania, the premium rent is squarely in the middle, at 16.5%, but we have seen cases with even higher figures. Tenants have relocated from older buildings to green buildings in the same area of Bucharest and paid over 25% for a new premium office, from EUR 11/sqm to EUR 14.5 /sqm net effective. This reflects a sustainability-driven relocation trend," Luiza Moraru, Head of Property Management CEE at CBRE, said at the CEDER 2022 real-estate conference.
"We have seen several stable tenants make relocation decisions driven by their new corporate sustainability goals. We are talking about a spread now, but since ESG criteria are becoming a must for tenants, it could be that being green means having occupied buildings," she added.
A key factor driving the growth in demand for premium rents is employee retention, according to a recent ESG study quoted by CBRE. Its results said that 70% of European millennials, who already make up the majority of the workforce, have gone so far as to say they would accept a lower salary to work for a company with a clear environmental mission. 71% of job seekers want to work for environmentally sustainable companies after the pandemic, and 86% of employees prefer to support or work for companies that care about the same issues they do. In addition, 83% of investors surveyed expect an increase in demand for sustainable buildings from tenants.
According to the CBRE European Investors Intentions Survey released in February 2022, 70% of all respondents have already adopted ESG criteria, and the majority of investors see upgrades as a key to ESG implementation. Also, from 2023 onwards, under EU legislation, some 50,000 companies with more than 250 employees or net revenues of EUR 40 million must submit CSRD reports, CBRE said.
The real estate firm also said that, according to EU Taxonomy, activities considered sustainable in the real estate sector include the renovation of existing buildings, the retrofitting being considered the best solution for real estate.
"The available data show that 85% of the European buildings were built before 2001, and 85%-95% will be standing by 2050. Investment in retrofit could generate to the European Union up to EUR 175 billion per year," CBRE said.
"In Romania, 69% of the modern retail stock was delivered before 2013. Of the total stock of 4.03 million sqm, only 0.53 million sqm has been refurbished in the last 3 years, indicating that redevelopment projects will become the norm rather than new development. With redevelopment and energy-efficient equipment, green features and green energy solutions become standard, in addition to the social and inclusiveness function that shopping centres already fulfil," it added.
(Photo source: Pixabay.com)