While the vacancy is lower and the rent is higher with green offices, sustainability is still not a priority in a significant part of business decision strategies – according to CBRE’s research.
Sustainability is still not a priority in many business decisions
According to CBRE’s research 38% of the respondents do not always develop their decision-making according to sustainability aspects. However, it would be advisable to discuss strategies, since, contrary to the assumptions, in many cases, the tenants and partners are also willing to invest in sustainability from their own resources – Fmbusiness.hu writes referring to the Hungarian Green Building Council.
Decisions made difficult
It is also worthwhile to constantly review the company’s decision-making processes related to real estate since the majority of respondents pointed out that factors like the lack of high-quality data, overly complex or expensive decisions, benefits that cannot be defined or guaranteed, different priorities for partners, uncertainty regarding possible government decisions, and lack of expertise are often problems in the decision-making processes.
Short-term thinking results in long-term loss
“The calibration of internal decision-making and the cooperation of the value chain are essential for an approach that embraces the entire life cycle: the industry needs both tenants and suppliers to minimize its impact,” explained Áron Horváth, head of CBRE’s Sustainability Business Unit. “In my opinion, most of the market players in Hungary – apart from certain exceptions – for now prefer the short-term opportunity and the fulfilment of basic obligations and the minimization of costs. However, this approach may have the danger of generating more costs and loss of income in the long run. The first important step is to be aware of the company’s real impact: a good example of this is the measurement of built-in carbon emissions, which is currently missing from domestic processes.”
55% of domestic offices are certified
Out of the 4 million office stock in Budapest, nearly 3.4 million sqm are rented offices. (The remaining is provided by privately owned offices of companies and the public sector.) Nearly 120 projects in the capital already have some form of international green certification, the British BREEAM System being the most widespread in Hungary. 55% of the total office stock has a certification, which is an exceptionally high number in European and similar to the value in Prague or Warsaw.
Qualified offices: better utilization, higher rent
“This is also due to the fact that the office stock in Budapest and Central Europe is relatively young, and in the last decade the pursuit of green certification has already become a standard in the case of ‘A’ category office developments,” – explained Gábor Borbély, CBRE’s research director. “In the spring of 2022, the average vacancy rate of the 120 certified buildings in Budapest was 10.5%, while the same indicator was 13.2% in the stock without international certification. Offered rents are on average 33% higher in the case of certified buildings – which of course is partly due to the fact that usually higher quality and younger buildings have obtained such accreditation.”