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Moscow, 07 December, 2016 – JLL has presented the results of its regular study ‘Sustainability and Green Development in Russia’. Over the last two years the volume of real estate certified to international sustainability standards* has nearly doubled, increasing by 1.7m sq m since 2014 and now totaling over 3.6m sq m.
According to JLL, a record-breaking amount of real estate, 1.1m sq m, was certified under international standards in 2015. In Q1-Q3 2016, the total amount of ‘green’ real estate has increase by 627,000sq m.
“Last year’s peak had to do with completed certification of a number of large projects, including stadiums and warehouses,” –
Ksenia Agapova, Head of Sustainability Services, JLL, Russia & CIS, says. – “In 2016 there have been fewer properties of that kind among certified objects, and new construction generally slowed within the country, hence the more modest results we see now. Nonetheless, most developers today consider environmental certification as a part of standard practice for their new construction projects.”
BREEAM, LEED and DGNB certified projects in Russia
The Moscow Region has the highest amount of certified buildings: with a total of more than 2.2m sq m, or 54 properties. St. Petersburg is second with 310,000 sq m, or 13 properties.
Breakdown of certified real estate in Russia by locationSource: JLL
Most (1.2m sq m—more than a third) of the certified space is offices. Second place goes to warehouses/industrial assets and sports objects, with 0.8m sq m, 23%, in each category.
“It was foreign market players who had stipulated the culture of environmental certification in Russia, especially international tenants interested in energy-saving and healthy offices and, to a lesser extent, warehouses. The share of retail space had increased significantly over past few years: in 2014 such objects comprised only 2% of the ‘green’ market in Russia, but by the end of Q3 2016 their portion increased to 15%, and we expect it to grow more.” – Ksenia Agapova notes.
Breakdown of certified real estate in Russia by segment
Retail makes up about half (370,000 sq m) of all properties certified in Q1-Q3 2016. Shopping centre developers and retailers are becoming more interested in certifying to ‘green’ building standards, it is a distinctive trend, which has to do with changes in legislation in the West and social and environmental reporting to which many multinational retailers are bound to submit.
Despite the doubling of the ‘green’ market over the last two years, it is still a small portion of the overall commercial real estate market. In Moscow, about 5% of offices are certified, as are 6% of warehouses, in St. Petersburg the figure is under 7% for offices and zero for industrial premises. There is certainly room for ‘green’ growth, says JLL.
“The overall tendency is obviously positive: owners and tenants of retail properties increasingly consider their energy efficiency and international certification as high priority. For Class A offices, LEED or BREEAM certificates become a must have. Judging by the projects our team is currently certifying, we can predict further expansion of this market to 700,000 sq m in 2017.” – Ksenia Agapova concludes.
* For this research, international sustainability standards meant all BREEAM, LEED and DGNB assessment schemes.
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006-2016 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, 2016, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015.
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