Sydney CBD Office Sustainability Overview

It’s clear that commercial property will be heavily impacted by the ongoing shift towards more ESG focused business practices. This report provides an overview of the sustainability initiatives being seen across the Sydney CBD office landscape.  

While efforts have been made to prepare for the shift towards sustainability, there is still considerable work to be done by both owners and occupiers to ensure that the space is well prepared and that we as an industry are doing our part for the environment. Takeaways from the report include:

• Occupiers are increasingly thinking about ESG in their day-to-day operations, and this is having material impacts on their leasing decisions.
• While leasing demand for highly credentialed ESG space appears moderate at first glance, demand is accelerating.
• The greatest demand for highly credentialed ESG space is coming from larger occupiers. Over 50% of office leasing briefs larger than 5,000 sqm made mention of ESG requirements.
•  Leasing demand is coming from occupiers across a broad spectrum of industries.
• While the Prime end of the Sydney CBD office market appears well suited to meet the growing demand for ESG credentialed space, Secondary properties are less prepared.
•  The next frontier for the property sector will be achieving Net Zero emissions targets. This won’t be possible without eliminating the use of gas energy and shifting towards refrigerants with much lower global warming potential. The Sydney CBD still has a long way to go in this regard as only 3.2% of the rated office stock in the Sydney CBD is currently fully electric.