Drivers Of Demand

The introduction of ever-more stringent legislation governing energy efficiency and sustainability is currently the key driver of demand in the emergence of energy efficient commercial buildings. In addition to current legislation, the prospect of future legislation is also a powerful driver of change. Other drivers of demand exist which are more closely-related to the property market itself. And despite a slow start, market-specific drivers – as detailed below - are playing an increasingly key role within the green building arena.

Corporate Social responsibility (CSR)

With more companies appreciating the benefit a CSR policy can bring to the bottom line, demand for energy efficient buildings is growing.

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Changes in relationships between landlords and tenants

With shortening leases, increased break clauses and a greater number of rent free periods, landlords are having to increasingly engage with tenants to maximise occupier satisfaction.

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Rents

Currently, few tenants are willing to pay more rent in order to occupy an energy efficient building. Yet, as energy efficiency certification becomes more widespread, a rental gap will open up between buildings with a high energy efficient rating and those that are lower rated.

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Costs

Energy costs still only represent 1% of total operating costs. But there are other ways of viewing costs; namely costs that are linked to the wider issue of sustainability, such as payroll (which represent 90% of total operating costs). Also, whole of life cost analysis can highlight potential savings over the long-term.

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