Office landlords take efficiency-boosting measures to cut energy costs

infinitSpace, the creator of white-label, tech-enabled, flexible workspaces, and The Instant Group, the largest global marketplace for flexible workspace solutions, commissioned independent market research firm Censuswide to survey 250 commercial landlords with offices in the UK about their existing sustainability practices.

The study identified which energy-saving measures are the most widely used and which landlords are prioritising in the years ahead as ambitions for a net-zero commercial real estate sector become increasingly focused.

The most prevalent measure already in place is setting waste management targets, with close to a third of landlords (31%) already implementing them across their portfolios. A further 64% plan to set targets in future, also making it the most attractive measure over the long term.

At joint-second were flex space and thermal efficiency measures (other than double glazing), with a quarter (25%) of landlords having already implemented these.

Landlords are increasingly turning to flexible workspace with 67% planning to implement an element of flex space in the future. This comes as demand for flexible workspace is rising globally, with the pandemic and high inflation accelerating this trend. The value of the global flexible workspace market is expected to grow from $33.23 billion in 2020 to $73.03 billion by 2026.

Meanwhile, less than a quarter of landlords currently have high efficiency/LED lighting (23%), sensor/timer-controlled lighting (23%) and double glazing (24%) in place, making them amongst the least adopted measures.

The rise in energy prices across the UK has played a significant role in accelerating demand for these measures, with 55% of landlords agreeing that it has incentivised them to improve the energy efficiency of their buildings. Meanwhile, external pressures have also been present with the UK government requiring a minimum EPC rating of E as of April 2023.

In a sign of landlords’ long-term commitment to sustainability and energy efficiency, over 90% of landlords plan to adopt measures over the long term. However, double glazing stood noticeably behind the rest, with just 58% of landlords planning to make the change in future.

The full list of energy-efficient measures landlords are implementing and plan to implement:

  • 31% of landlords have already set waste management targets while 64% plan to (95% overall)
  • 25% of landlords have already adopted thermal efficiency measures other than double glazing while 67% plan to (92% overall)
  • 25% have already converted parts of traditional workspace into flex space while 66% plan to (91% overall)
  • 23% of landlords have already adopted sensor-controlled/timed lighting while 64% plan to (87% overall)
  • 23% of landlords have already adopted LED/high-efficiency lighting while 74% plan to (97% overall)
  • 24% of landlords have already adopted double glazing while 58% plan to (82% overall)

Wybo Wijnbergen, CEO of infinitSpace, said: “From infrastructure upgrades to policy targets, it is highly encouraging to see the vast majority of landlords planning to implement measures to boost the efficiency of their buildings, while many have already done so. Indeed, such changes will be instrumental to their businesses’ continued success as energy costs remain high and regulatory pressures intensify. Not to mention, it signifies an excellent step in the right direction for the sector in terms of reaching ambitious sustainability goals and net-zero targets.

“It is also highly encouraging to see the wide appeal for flex space not only as a commercial opportunity but as a way to maximise space efficiency and provide a green edge. Although many of these measures may appear time-consuming and bear initial upfront costs, landlords should remember that they don’t have to go it alone; flex space operators can oversee the implementation of new and, as this research makes clear, much-wanted energy-efficient measures, streamlining the sustainability agenda.”

Sam Pickering, Executive Director of Sustainability at Incendium (part of the Instant Group) said: “It is positive to see the steps landlords are taking to improve the energy efficiency of their office stock. There are several drivers behind the upgrades being made by landlords, including regulation, environmental concerns and crucially occupier demands. Occupiers are increasingly focused on how their office space fits into their overall net zero plans and targets. Without these essential upgrades we will be in a scenario where office space becomes obsolete and unusable from a portfolio strategy perspective that takes sustainability into account. Progress is definitely going in the right direction and it is encouraging to see landlords committing to implementing more measures, as well as recognising the vital role flexible workspace can play in improving energy efficiency.”