The Business Times

Asian landlords must do more to pursue green initiatives

David FogartyAda Choi
Published Tue, Aug 30, 2022 · 06:56 AM

OVER the past decade, the building and construction sector has come under increasing pressure to reduce carbon emissions. Estimates by the United Nations Environment Programme show the sector accounts for 38 per cent of all energy-related carbon dioxide emissions. One of the biggest obstacles to reducing greenhouse gases in the environment is the need to upgrade or redevelop older buildings, and Asia still lags other regions such as Europe in this area.

While CBRE surveys show occupiers in Asia increasingly favour green buildings to improve the health and well-being of employees as well as reduce their global carbon footprint, adoption is being stymied by a lack of transparency around data and the region’s lack of uniform environmental, social and governance (ESG) reporting guidelines.

In Japan, for example, benchmarking and certification are less of a priority since leases are heavily dependent on the landlord-tenant relationship and how reputable the property owner is. In India and Vietnam, feedback from occupiers shows there are concerns about transparency and data.

There is also the issue of cost as just 9 per cent of tenants are prepared to pay higher rent to move into green buildings, found CBRE’s most recent survey.

Lessons from Singapore

Singapore has emerged as a regional leader in the reduction of carbon dioxide emissions from real estate, with plans to “green” 80 per cent of building space by 2030, from 49 per cent at the end of 2021.

While the greening of Singapore buildings is partly due to demand from the many Western multinationals with regional headquarters in the city-state, other governments can emulate Singapore by providing landlords and property investors with an outline of upcoming changes to legislation and ESG reporting requirements.

Friday, 8.30 am
Asean Business

Business insights centering on South-east Asia's fast-growing economies.

In February 2021, Singapore published a 2030 green plan which included initiatives such as green finance and developing and testing new technologies such as carbon capture, utilisation and storage. The Building and Construction Authority (BCA) also introduced incentives for landlords to redevelop older buildings.

In addition, BCA raised sustainability standards under its “Green Mark” scheme and introduced a new “super low” energy rating with requirements that surpassed the current platinum standard, raising the bar for developers.

Elsewhere in the Asia-Pacific, Australia is another standout with nearly three-quarters of office buildings qualifying for the National Australian Built Environment Rating System benchmark. One key finding from Australia is that age is not a barrier, as around a quarter of properties built before 2000 have top-level ratings of 5.5 or 6 stars.

What landlords can do

Many landlords find it difficult to green existing properties because of the high cost of retrofitting. Instead of only looking at the upfront project costs, landlords should adopt a whole life-cycle approach to calculate the costs and benefits.

Landlords can install standalone meters to track the electricity and water consumption of individual tenants as well as specific areas such as elevators, lighting systems and shared restrooms. The data collected will help in planning when property owners decide to go ahead with the retrofit. As for more specialised enhancements such as solar panels, specialist clean-energy providers have the expertise to build cost-effective solutions as well as provide landlords with upfront capital in return for supply contracts. Landlords also need to improve their communications with tenants by sharing data and future plans relating to green leases and other ESG-related requirements.

As legislation in Asia-Pacific differs significantly across individual markets, and the region is a complex and often opaque environment to operate in, landlords must be open to hiring experienced service providers to help them identify and navigate the regulatory landscape. Areas where external experts can help include ESG audits, helping landlords adhere to international green building standards, and ascertaining the appropriate strategies to pursue in each location.

While there are roadblocks hindering the transformation of the property sector in the Asia-Pacific, landlords need to be proactive in greening their buildings to attract occupiers and alleviate the worst effects of global warming. Adopting ESG principles and “going green” are long-term trends that landlords and property investors cannot ignore.

The writers are from commercial real estate services and investment firm CBRE. David Fogarty is CBRE’s senior executive director, head of sustainability & ESG consulting services, South-east Asia. Ada Choi is CBRE’s head of occupier research, Asia-Pacific.



BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to



Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here