Savills Singapore launches energy and sustainability management department

SAVILLS Singapore has set up an energy and sustainability management (ESM) department to provide custom energy and sustainability-related solutions to building owners, occupiers and real estate investors.

These solutions will help to reduce the operational costs and embodied carbon footprint of buildings while maintaining asset relevancy, said the real estate service provider on Friday (Mar 3).

Led by Samuel Han, the ESM department was launched to meet an increasing demand for green properties amid rising public awareness of sustainability. It also comes in response to the implementation of Singapore’s Green Plan 2030 to achieve net-zero carbon emissions, said Savills.

One potential solution would be for landlords to consider introducing green leases to their properties. A green lease incorporates additional, legally binding clauses for both the building’s management and occupiers to improve the environmental performance of a building.

This would promote mutual energy savings and reduce waste for both landlords and tenants, said Sam Crispin, regional head of sustainability and environmental, social and corporate governance (ESG), at Savills Hong Kong.

Han said: “While many asset owners, occupiers and real estate investors feel the urgency and demand for green properties, they may not understand how to get there. Our goal is to be their choice consultant to take them step-by-step to green their properties and achieve their sustainability targets. We drive progress through sustainable solutions and securing our tomorrow.”

Han joined Savills in June 2022 as the group’s energy and sustainability senior manager before he was appointed as an associate director to head the new ESM department in January 2023, his LinkedIn profile indicated.

He was previously at energy management company Teale, where he held the roles of energy business manager and senior energy engineer.

Savills highlighted an increasing demand for green-rated Grade-A offices due to the new mandate for multi-national tenants to comply with the ESG standards of their respective countries of origin, citing data from its latest office leasing report. It projects a 2 per cent year-on-year increase in overall gross rentals for Savills’ basket of central business district Grade-A offices in 2023. This is due to a continued emphasis on sustainability, the trend of family offices setting up in Singapore, and higher service charges due to inflation.

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Separately, CBRE’s global survey findings suggest that companies are willing to pay a premium for spaces with environmental features, such as on-site renewable energy generation or smart technology, to help reduce energy consumption and carbon emissions.

Based on a survey of over 500 commercial real estate professionals in 2022, 84 per cent of respondents said that they specifically look for energy-reducing features in their search for spaces. Almost half said they would either seek a discount or refuse the deal if a building lacked such features.

Notably, 45 per cent of respondents said they would pay a premium to lease or buy a green-certified building. Another third of all respondents said they would either seek a discount or reject a building without certification.

Other key findings from CBRE include a heightened focus on ESG strategies in 2022 due to higher energy prices and government-imposed disclosure requirements.

CBRE said that this sentiment appears more prevalent among real estate investors – although occupiers plan to meet net-zero targets sooner than their investor counterparts, and under a “more robust set of principles”.

“Occupiers plan to achieve their targets more quickly than investors, aided by the fact that lease terms are generally shorter than the average holding period for investors,” said the real estate investment services firm.