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Climate Protection and the Turnaround in the Office Real Estate Market

Climate Protection and the Turnaround in the Office Real Estate Market

The next 12 to 24 months will be crucial for the office real estate market as the impact of climate change commitments is increasingly felt. Companies face the challenge of making significant progress towards their climate targets with their next property leases. The limited supply of low-carbon buildings is becoming a key issue as demand grows faster than supply. According to JLL forecasts, it is estimated that by 2025, around 30% of the demand for such space in 21 cities worldwide will not be met. 


Urgency and opportunities 

Tenants are increasingly prioritising buildings that are energy efficient, do not use fossil fuels and are powered by clean energy. As a result, property developers are increasingly opting for low-carbon concepts in new projects. For investors, this change not only means urgency, but also opportunity: those who can demonstrate measurable progress in a building's carbon footprint will be favoured in the market. 


ShareYourSpace: an important lever 

In this context, ShareYourSpace plays a key role as a digital marketplace for renting and leasing workspaces. The platform offers companies the opportunity to rent existing, sustainable and energy-efficient office space instead of constructing new buildings. Companies can also offer corresponding spaces for rent. This reduces the need for new buildings, which can be declared "sustainable" according to current standards and consume fewer resources, but are associated with high CO2 emissions and land sealing, thus helping to conserve resources. 

ShareYourSpace offers an effective solution to meet the requirements of the modern working world and at the same time make an important contribution to sustainability by offering, visualising unused space and networking space providers and tenants. 


Changes in the property market 

Over the last four years, property markets and cities around the world have changed dramatically. Hybrid working models have reduced the demand for office space, which has led to a miscalculation of office space and too much unused space, resulting in high vacancy rates in office centres. The search for quality has broadened to include energy efficiency and sustainability certifications. More discerning occupiers are looking for space that not only improves their carbon footprint but also reduces operating costs. 


Science Based Targets Initiative (SBTi) 

An important driver of this development is the Science Based Targets Initiative (SBTi), to which more than 7,600 companies have signed up. This initiative sets ambitious targets for reducing their CO2 emissions and looks for properties that fulfil these targets. This clearly demonstrates the increasing demand for sustainable and energy-efficient buildings. The SBTi is therefore a key factor that highlights the urgency and importance of sustainable property solutions and increases the pressure on the property leasing market to adapt to these new requirements. 


Supply and demand dynamics in the property sector 

Although demand for sustainable, low-carbon office space is steadily increasing, the latest JLL 2024 study shows that supply will not be sufficient to meet the demand for sustainable office space without increased renovation and modernisation measures. Forecasts assume that around 30 per cent of the demand for such space in 21 cities worldwide will not be met by 2025. This gap could even rise to over 70 per cent by 2030, depending on the city and specific climate-related commitments. 


The ecological tipping point 

Companies renting office space are at a crossroads as climate commitments become increasingly important. Over the next 12 to 24 months, the pressure on companies to meet their sustainability targets will increase significantly. This requires not only internal measures, but also choosing the right office space that is low-carbon and energy efficient.  

At a regulatory level, the number of government regulations on the decarbonisation of buildings is steadily increasing. The world's largest economies - including the US, EU, UK, Australia and Canada - have introduced or are about to introduce mandatory rules on ESG disclosure. These rules aim to increase transparency and accountability and require companies to measure, report and reduce their carbon emissions. The first reports will be available by 2026 at the latest and will show whether the ecological turning point at which companies find themselves is producing the desired results and emissions have been halved in line with the Paris Agreement


Future Outlook 

Political efforts to reduce building emissions are increasing. By 2025, a tipping point will be reached where 30% of market demand for low-carbon office space cannot be met. Over the next 24 months, many leases with CO2 obligations will expire, further increasing the demand for climate-friendly office space. 


The path to a climate-neutral economy requires considerable efforts from all players in the commercial property industry. The next few years will show whether the gap between supply and demand can be closed and whether the transition to climate-friendly office space can be successfully organised. Each individual can contribute by focussing on the use of existing office space instead of constructing new buildings. Sharing models, such as those offered by platforms like ShareYourSpace, enable more efficient use of existing space. In addition, networks and co-operations can help to find innovative solutions for the sustainable construction and operation of office buildings. Conscious behaviour in everyday office life, such as reducing energy consumption and waste, also contributes to achieving climate targets. Together, we can make an important contribution to reducing the carbon footprint and making the commercial property landscape more sustainable.


About ShareYourSpace
ShareYourSpace operates www.shareyourspace.com, the digital marketplace for flexible renting and leasing of all types of workspaces. The service is aimed at anyone who wants to better utilise space - owners, tenants, subtenants, start-ups, SMEs, large corporations, the public sector, asset managers, coworking operators and the hospitality industry - as well as anyone who needs workspaces, whether for sole use or for coworking and new work. Together with our customers, we also move the biggest sustainability lever in the construction, property and working world in order to reduce the carbon footprint, relieve traffic, avoid land sealing and conserve resources - in an industry that accounts for 40% of the global carbon footprint.


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