The ratings themselves, particularly in regard to service charge process and management, show marginal year-on-year growth from an uncomfortably low historic base. So, as an industry, we have much to do.
Jaw-dropping survey result
The real jaw-drop moment occurs when you realise that the occupier’s greatest area of dissatisfaction refers to the landlord’s attitude to environmental issues. Of course, sceptics will point to the tattered reputations of businesses which have failed to embrace corporate social responsibility (CSR), at least as a marketing technique, as the reason why every corporate shareholder pack demands a CSR reference. Yet, there may be more to this startling research conclusion than meets the eye. If we assume that the research reflects genuine occupier dissatisfaction, the repercussions for the commercial property value chain are considerable, flowing from occupier dissatisfaction all the way back to the longer-term vision of the investor community.
Investors have a profound new relevance
Perhaps it is therefore time to consider that theinvestor’s role may be about to take on a profound new relevance: on the one hand, helping our legislators and policy makers to empathise with the compliance challenges of creating a robust and sustainable environment for the longer term, whilst on the other hand, understanding the shorter term expectations of occupiers and guiding the developer community towards meeting those expectations.
Energy Performance Certificates and environmental assessment methods such as BREEAM appear as mere precursors to an emerging array of material science, risk assessment, ergonomic analysis and financial modelling tools which will bring clarity to occupier expectations, inform policy-making and underpin the investment decision-making process. Environmental integrity and social equity will soon sit comfortably alongside financial profitability, sure in the knowledge that this tripartite expression of bottom-line performance is being driven by occupiers prepared to pay more for business continuity, global citizenship, carbon consciousness and the reputation enhancements which will follow.
Environmental change demands a change in attitude
Whether climate change is a natural phenomenon or is being driven by the continuous abuse of fossil fuels is a moot point. As exemplified by the extremes of wind, water and heat which too often combine to form extreme weather events, there is tangible change in our physical environment which demands a change in attitude towards the future of the built environment. That change, reflected in the short-term expectations of the occupier, can only truly be driven by knowledgeable and informed investors, equipped with the tools to understand emerging risk profiles and prepared to take the industry forward. The adaptation of existing property stock and the development of a future for the built environment which can withstand all that Mother Nature is prepared to throw at us is the new game in town.
This article is part of Asset Class winter 2013