Savills: European office and logistics most shielded from energy shocks
According to Savills latest research, European offices and logistics are the two commercial real estate sectors most shielded from energy shocks as utility costs account for a relatively small share of total business spending.
The international real estate advisor estimates that the share of energy costs reflects 2 to 4% of the total expenses for occupiers in the two sectors. Staffing is responsible for more than 50% of the total costs for office occupiers and the combined outlays for transport and labour accounts for more than 75% of the total costs for warehouse occupiers.
Retailers generally consume larger amounts of energy and are not always able to pass the costs on to customers while data centres and the life science industry are heavily reliant on energy. However, power usage effectiveness (PUE) in data centres is continuously improving and current operators are exploring more alternative and greener sources of energy supply such as on-site hydrogen fuel cells which could also be introduced to the life science sector.
Savills believes that retailers could consider other (smaller) solutions such as lowering temperatures in their shops, turning off the lights outside opening hours and/or closing their doors. Research from Cambridge University shows that shutting shop doors in winter reduces energy usage and carbon emissions by up to 50%.
Dan Jestico, Director, Savills Earth, says: “Commercial real estate is significantly exposed to the impact of the energy crisis and faces multiple challenges in the near future to secure reliable, affordable and ‘clean and green’ energy. Both landlords and occupiers can and must address these challenges together, by investing in energy-efficient interventions, driving improvements to both building fabric and energy consuming systems to reduce energy consumption and lower costs over the long term.”
Katarzyna Chwalbińska-Kusek, Head of ESG and Sustainability, Savills, says: “With energy costs on the rise, improving energy efficiency in buildings is likely to be an absolute priority for almost everyone in the months ahead. In addition, new ESG reporting guidelines require companies to take immediate action on energy management in commercial buildings. New technology solutions such as Climate Tech are extremely useful in this, but it is important to begin with absolute basics during the project design stage such as building insulation and leakproofness, reducing energy requirements, contracting green energy to reduce carbon emissions and using renewable energy sources wherever possible. In addition to savings and lower carbon emissions, another important measure is sustainable management of other resources, including scarce resources such as water, through recycling.”