All is WELL in high-performing workplaces

A recent CBRE survey of more than 500 commercial real estate professionals worldwide has revealed that buildings that contain a range of sustainable features and look after their people are of increasing value to owners and occupiers.

The results of the Creating Resilience: Strengthening Value Through ESG survey, which was released in February, showed that despite increased economic uncertainty it is clear that the focus on Environment, Social and Governance (ESG) factors in real estate intensified in 2022, and that the value and importance of ESG is set to endure for investors and occupiers.

Two key trends emerged from the survey. First, almost half of respondents would pay a premium for green-certified buildings, and 79% of respondents cite green building certifications as having an impact on real estate decisions.

Second, a leading trend to emerge from the survey was a strong emphasis on tenant and employee wellbeing. Nearly half of respondents said they are willing to pay a premium for buildings that support the physical and mental health of their employees.

More than 80% indicated that proximity to public transit (or lack thereof) impacts property values because easier commutes are associated with better employee well-being.  And 60% of respondents agreed on the top five social building features that impact the value of real estate transactions—all focused on tenant health and well-being:

How social building features impact a real estate transaction

While investors and occupiers appear aligned on the top social features of buildings, the survey showed that occupiers more commonly agree on the importance of features that promote employee health, wellness and inclusiveness. As Kaela Fenn-Smith, Managing Director, Sustainability & ESG Consultancy for CBRE UK & Ireland, says in the report: “We’re finding that investors and occupiers are now increasingly seeking to ensure that the buildings they own or occupy deliver employee health, well-being and engagement, alongside a broader benefit to their local communities. We believe that socially responsible real estate addresses not just reputational risk but establishes how best to deliver positive impact.”

‘Green buildings’ mean those that are beneficial to our wellbeing

This survey comes at a time when many companies all around New Zealand and overseas are working hard to attract their employees back into the office. As organisations are coming to realise the value of a sustainable future, they are also seeing the value that well-designed, environmentally conscious and healthy buildings offer not only to improve health outcomes for people and communities but also to draw people back into a healthier world of work. In turn, this is driving concepts such as ‘hotelification’ and ‘earn the commute’ to the fore.

“Your personal space has a direct impact on state of mind, emotional well-being and productivity,” says Su-Fern Tan, Head of ESG, Pacific. “Everything from layout and lighting to air quality and sound can impact your health, mood, and productivity. Studies show that employees who work in healthier spaces and buildings take fewer sick days and enjoy a higher cognitive function.”

Speaking during a CBRE Green Week session titled ‘Realising the Benefits of Green & Healthy Buildings’, Tan said that numerous studies have shown the benefits of green buildings relating to fresh air, natural light and views. “A building that’s good for people keeps them healthy and maximises wellbeing and productivity. And a building that’s good for the planet is energy and water-efficient, has zero waste and links green modes of transport for its occupants.”

“The goal for operators and designers is to hit the sweet spot where you have a healthy building that efficiently consumes minimal resources in the process.” 

Tan adds that certifications such as the WELL Building Standard, which was launched in 2014, and Fitwel, encourage behaviour that is conducive to wellbeing. “For example, are there healthy food and snacks offered or are the staircases connected? Those are just some of the things that traditional green building ratings don’t look at,” she says, adding that visionary companies are ones that maximise the people asset. “In a company that has only machinery as its main asset, the company makes sure its machinery is fully maintained. In companies that run on brainpower, it’s important to keep our people healthy, productive, safe and happy in wonderful spaces.”

Mansons leading WELL emergence in Auckland

So, as standards like WELL become increasingly commonplace in commercial office buildings in many parts of the world, how is it playing out in New Zealand? Although it would definitely be a stretch to say that it is commonplace in the Auckland market, it is starting to emerge here as a powerful tool to help building owners wrestling with the ‘flight to quality’ dynamic, says Nick Theyers, Director of Office Leasing in CBRE’s Auckland office.

“Occupiers such as 2degrees have implemented WELL certification in their workspaces now over the past year, and we are starting to see landlords in the Auckland market explore and target this certification. The flight to quality real estate is real as companies seek to attract people back to working in the city in higher quality, healthier, more amenity-filled offices. Tenants are not only seeking accommodation that aligns with their own ESG goals and standards, but also a higher quality of space with premium amenities. This is also about the battle against the home office, proving the value proposition of the office space, and forward-thinking landlords who see the dynamic and the way it is evolving are getting ahead of the curve.”

Theyers says that one landlord leading the way in this area is the developer of 136 Fanshawe Street, where 2degrees is based. Recognised as the market leader in the development of green office buildings, Mansons TCLM has taken their approach even further in their latest development at 50 Albert Street.

Mansons are working to achieve a Platinum Wellness Rating for this latest building, says Culum Manson, Director of the company and a driver of WELL certification within the organisation. “Our strategy is to target a WELL Core Certification, the base build rating, to a Platinum level. For us, the strategic benefit of a WELL Core Certification is that it encompasses everything from the whole building itself to the building management staff and the project owners, thereby requiring buy-in from all facets.

“To deliver the certification, we are in a number of discussions with our suppliers. These range from lighting control options such as daylight harvesting and light tuning options, the thermal performance of the building’s façade, and the scope for improvement of our base build HVAC’s energy efficiency, through to family support policies for direct staff and the provision of fruit, vegetables and nutrition information for the building’s occupants.”

Proposing to target a WELL Certification for all of the company’s future projects, Manson says that there is real value in doing so for the ultimate building owner and all occupants. “Seeking a Core Certification ensures that the provision of the likes of air quality, ventilation and filtration rates, lighting control, on-site facilities (such as end-of-trip facilities), acoustic levels and thermal control are constructed and installed to an extremely high threshold for the benefit of the building’s occupants. It also provides a logical pathway should any tenants choose to pursue a WELL Certification for their own respective fitouts.
 
“The credits that we are choosing to apply for have the added benefit of creating a workplace for its occupants that is not only an enjoyable place to work in, but they also establish tangible health and wellbeing benefits for the building’s occupants. The whole point of it for us is to create a platform for tenants to supercharge their wellness and sustainability. The wellness platform is all about occupier comfort. We want to enable tenants to invest in their fitout and space, and give them a leg up. It’s another layer of quality, and the results speak for themselves."

“When we look at the future, it is important for us to keep pushing the boat out in terms of quality. These buildings are like software; we keep evolving them every couple of years to help them get better and better, and we have to keep up with it. Our customers are more discerning, and they need to make the workplace more occupier-friendly and sustainable.”

The standard is now well set, and likely to become the next baseline as occupiers seek ever-higher quality space with the premium amenities that green and WELL buildings provide.