Next X: The Most Highly Desirable Green Boroughs to Live and Work in London
BNP Paribas Real Estate has identified a ‘top 10 list’ of highly desirable green boroughs to live and work in the UK’s capital. The Borough of Hammersmith & Fulham tops the list, followed by Westminster, Richmond upon Thames, Lambeth, Sutton, Bexley, Croydon, Greenwich, Ealing and Bromley.
The ranking has been generated through BNP Paribas Real Estate’s unique location analysis model, Next X, which draws on a series of environmental data to determine how well these locations perform against these criteria.
Next X looked at aspects such as supply of environmentally friendly office space, (BREEAM rated), in these locations as well as ultra-low emissions vehicle (ULEV) usage and access to electric vehicle charging stations. It also reviewed supply of cycle parking spaces at rail stations and air quality at these places across the UK.
The Borough of Hammersmith & Fulham leads the way due to its high increase in ULEVs and its provision of EV charging points, while Richmond also scores highly due to having good cycle parking provision and roadside air quality. Unsurprisingly, Westminster features the highest number of BREEAM-rated office buildings, due to its central location and large supply of office buildings. Hammersmith and Richmond are smaller office markets by comparison, but offer more affordable rents. According to Costar, the average asking rent for Grade A space in Hammersmith and Richmond is approximately £53 per sq ft vs £77 per sq ft in Westminster. Data from Next X also shows that Hammersmith is by far the best London location for proximity to road and rail links, while Richmond ranks 11th and Westminster 28th. The findings therefore suggest that Hammersmith is an attractive location for eco-conscious office occupiers looking for affordable but accessible space.
Growing evidence, in the UK and further afield, suggests that sustainable offices are retaining both higher rental and investment values. Locations with strong supply of certified green offices are therefore more likely to attract both businesses, talent and investment.
Over 50% of European respondents in RICS Q3 2020: Global Commercial Property Monitor survey believed that occupier demand for buildings with Green Building Certifications has risen in the past year and over 60% believed that investor demand for sustainable buildings had increased during the same period. 40% respondents also thought that green buildings would receive a rent premium compared to non-certified buildings.
A survey featured in KPMG’s, report “Real Estate in the New Reality” found that 83% of real estate professionals believed that COVID-19 would generate a significant increase in tenants’ demand for sustainable and environmental-friendly buildings. It also found that 85% were either planning to change their portfolio strategy to focus more on sustainable investments or were already focused on ESG as a criteria.