Decarbonising Asia Pacific’s Office Buildings

Reducing environmental impact is a priority for companies across the world, and with the real estate industry accounting for up to one-third of carbon emissions in Asia Pacific, there is growing pressure to decarbonise the region’s office buildings.

Green buildings have a crucial role to play in the industry’s decarbonisation journey, and are a key component of both landlords’ and tenants’ real estate decarbonisation initiatives. 

This report explores the net zero journey and gaps between occupiers and asset owners, assesses the green building landscape and adoption rates across the region, and estimates the green rental premium across major Asia Pacific markets.

Occupiers’ and Asset Owners’ Decarbonisation Journey

Corporate commitment towards achieving net zero remains strong, despite some companies starting to consider delaying their initial net zero targets or sustainability pledges. Meanwhile, many landlords and investors continue to make steady progress towards real estate decarbonisation, which is expected to narrow the net zero gap between owners and tenants. This should eventually result in potential alignment between the two parties.

Green Building Adoption

There has been steady growth in green building adoption in Asia Pacific, increasing from 44% in June 2023 to 51% as of June 2024. Major Australian cities, Singapore and Tokyo continue to lead the way. Progress in mainland China varies, with Beijing and Shanghai the leaders. A strong push has been observed towards green building adoption in India, where the individual state governments have introduced tax benefits for developers. 

Green Building Premiums

Green buildings remain in demand, with CBRE Asia Pacific Research finding that occupiers’ most sought-after ESG-related building feature is green building certification. CBRE analysis to estimate the green rental premium in Asia Pacific finds that the extent of the green premium varies, with a lower rental premium present in regions with higher rates of green adoption. The analysis also finds that green offices have higher occupancy rates than non-green buildings, bringing additional benefits to asset owners that incorporate green buildings into their portfolios. 

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