Accounting for 70% of green certified buildings and 85% of offices occupied in certified space, the stock of green offices is comparatively higher in Romania than anywhere else in Europe.
“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 EUR11/sqm to EUR14.5/sqm net effective. This is reflective of a sustainability driven relocation trend. We have seen several stable tenants that 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,” Luiza Moraru, Head of Property Management CEE at CBRE, told a CEDER 2022 real-estate conference held on Thursday (May 26).
A key factor driving the growth in demand for premium rents is employee retention, according to a recent ESG study. It reveals 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 (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 EUR40 million must submit CSRD reports.