Asia Pacific cities facing shortage of sustainable office buildings: JLL

Tengah EC is conveniently located near the station. Residents will benefit from the convenient transportation options available. The developer has also incorporated a series of green and eco-friendly initiatives in the design of this development. This includes the use of bamboo for building structures, preserved green spaces, and energy-efficient appliances. All these initiatives will make for an enhanced living experience for residents.

Occupiers in major cities in the Asia Pacific (APAC) region are increasingly seeking out greener buildings, yet due to net-zero carbon (NZC) targets, there’s a critical undersupply of sustainable buildings in the region, according to an October research report by JLL. Kamya Miglani, head of ESG research, Asia Pacific, at JLL, finds that a lack of stringent regulations mean many buildings with platinum-grade green certifications may not even be NZC-ready.

To better understand the situation, the JLL Sustainable Offices City Index evaluated 20 cities in APAC on four themes – green stock, physical risk to buildings, city competitiveness and proactiveness with NZC targets. The results reveal an alarming undersupply of NZC-ready office space across the board.

In Sydney, considered the top-ranked city in this index, current green building standards are not enough to achieve a NZC-built environment. This is expected to lead to an 84% undersupply of NZC-ready office space by 2027. Emerging markets such as Hong Kong and Mumbai, meanwhile, are expecting 68% and 62% supply deficits of top-quality sustainable workplaces respectively, while Singapore is expecting a 56% undersupply of NZC-ready offices.

Miglani warns that should occupiers fail to plan ahead and re-evaluate the sustainability credentials of their current premises in time for lease expiries, they risk being stuck with limited options. To bridge the supply-demand gap, JLL suggests accelerating the rate of retrofitting – tapping into potential from the over half a billion sq ft of Grade-A office space in the region built before 2011.

In addition, governments in some cities are starting to play a role in addressing the supply-demand gap. In Australia, an energy performance measure was introduced, while Singapore provides subsidies to building owners to lower upfront capital costs for energy-efficiency retrofits.

“The involvement of governments, coupled with corporate demand and action, will fuel the momentum and ensure a steady pipeline of NZC-ready office stock in the future,” Miglani opines.