Sustainability is well established as a key factor in the investment and development of real estate. Environmental awareness is probably the greatest it has ever been, and the real estate industry knows very well the benefits that sustainable buildings can bring.
The notion of a ‘green building’ is often more typically linked to commercial buildings. However, there has been an increased trend over the years to provide more sustainable buildings in the industrial sector.
There are a number of reasons why the industrial sector has followed the path of its bigger, commercial brother. One of the key drivers is to increase operational efficiencies through cost reduction such as energy and resource consumption.
The need to comply with regulations, such as EPC certification, has assisted in making ‘energy’ the centre of attention. The real estate industry has tended to focus strongly on energy efficiency, which is probably largely driven by consideration of running costs, and the bottom-line benefits are tangible.
Health and wellbeing
Over the last five years or so, another area of sustainability that the commercial sector has strongly focused on is health and wellbeing. On a personal level, the benefits of working in a lighter, brighter building specifically designed to improve the health and wellbeing of its occupants is also very tangible, but more so to its users.
However, commercially for landlords, it is a harder sell. The main reason for landlords considering health and wellbeing in their portfolios more recently is driven by demand from tenants.
Environmental sustainability has become very strongly linked to the identity of an organisation, from the products the company sells, to the way it operates and the space it occupies. Buildings with greener credentials are more marketable and attract higher rental income and longer occupancy.
Since the Covid-19 outbreak, it is hard not to imagine that health and wellbeing is going to become even more of a prevalent factor in building design and management. It is at the forefront of everyone’s mind on a global scale.
Natural way to boost productivity
Following the mass shift to home working brought on by the current situation, when you ask what people want from a working environment now, most will say natural light, natural fresh air, a comfortable temperature and a connection to nature.
This is important information to pay attention to. There are various studies, which demonstrate that these factors create marked improvement in productivity - a critical point for the typical occupiers of industrial warehousing. The wants of building users are often not complicated or expensive to achieve since the operative point they are making is about having a connection to something ‘natural’.
Natural ventilation, natural light and building temperature can be achieved through passive design techniques and the industrial sector can readily adopt such measures. Roof lights can be specially designed to provide light and air into a warehouse for example, which will also drive reductions in carbon emissions.
Managing carbon emissions
Sustainability should not be about ticking a box, or following a trend, it should be to create a meaningful difference. Carbon emission reduction also needs to remain high on the agenda.
Whilst in the midst of a global pandemic, it is hard to also think about climate change. However, that too is a crisis that will affect everyone globally, and this must not be forgotten during the current situation.
It has been remarkable to see how quickly governments and citizens have sprung into action to control the virus. With the widely reported positive side-effect that the lockdown situation has had on the environment, it is hoped that individuals and industry will strongly reflect on this and take action to reduce carbon emissions in the longer term.
The industrial real estate sector needs to take a collaborative approach to this due to the extent of carbonisation through the supply chain. Engagement with occupiers will be essential in delivering the right buildings to allow a reduction in operational carbon emissions.
The commercial sector has found real success in adopting BREEAM as a framework for developing and operating greener buildings. The briefing paper ‘Assessing carbon emissions in BREEAM’ published in 2016 demonstrated that the average CO2 saving for a BREEAM assessed building is 22 per cent, whilst a BREEAM Excellent building is expected to reduce carbon emissions by 33 per cent.
It is reported that the increase in capex to deliver a BREEAM Excellent or Outstanding building of industrial use is lower than that of a commercial building.
Carbon reduction might not be as tangible as bottom line, or personal wellbeing. However, the recent images of once severely polluted cities seemingly transformed by reduced global emissions should speak to all sectors as a call to action in tackling the climate crisis.