Green Office Rent Premiums Vary Widely, With Singapore Among the Lowest
Savills found a 23% average premium in Hong Kong, while Singapore’s is limited as green features become standard.
Green office upgrades don’t command the same rent premium everywhere. Savills’ analysis of more than 2,000 buildings found the largest average premium in Hong Kong, at 23 per cent, while Singapore ranked lowest among the six cities studied. The gap points to a market effect: where sustainability features are already common, they may help protect a building’s appeal without adding as much rent as they can in places where greener space is less widespread.
The other city averages were 18 per cent in Amsterdam and 11 per cent in London. In the United States, the premiums were smaller still: 6 per cent in Chicago and 7 per cent in New York. Savills compared rental values in Amsterdam, Chicago, New York, Hong Kong, London and Singapore, accounting for building age and size to isolate the relationship between environmental standards and rents.
When green features become the baseline
Singapore’s low ranking doesn’t mean green improvements have no value there. Savills’ explanation is that most buildings already meet the standards in question, and tenants increasingly expect those features as a basic part of an office. When a characteristic is widespread, it can be harder for landlords to charge extra for it, even if failing to provide it could make a building less attractive.
That distinction matters to owners weighing renovation costs. In a market where efficient systems and environmentally minded materials are already common, an upgrade may be more about keeping a property competitive than securing a clear rent uplift. The analysis gives a citywide comparison, though; it doesn’t establish what any individual building would earn from a particular project.
Energy efficiency has gained attention as businesses face recurring energy crises and volatile oil and gas prices. Better insulation and lower energy demand can reduce exposure to energy costs, while tenants may also value comfort, building quality and access to amenities. Georgios Askounis, a director at Savills Earth, said tenants appreciate buildings that are healthier, use less energy and are less likely to overheat.
For owners, the potential benefits extend beyond rent. Askounis said greener buildings can be cheaper to finance and may offer a more reliable way to preserve value. Those considerations sit alongside the cost of refurbishment: Savills clients are weighing whether expensive renovations to meet the highest environmental standards can be justified by leasing and asset benefits.
London shows a wider range within one market
The city averages also conceal differences between buildings with varying levels of certification. In London, Savills classified the highest green standard as “outstanding.” Those buildings could charge an additional 28 per cent in rent, and tenants stayed for an average of almost 10 years, the analysis found.
Buildings rated “excellent,” one level below “outstanding,” could charge 10 per cent more and retained tenants for almost eight years on average. These figures suggest that, in London, stronger environmental credentials were associated with both higher rents and longer tenancies. They don’t establish that certification alone caused either outcome, but the pattern gives landlords a reason to assess the costs of higher specifications against potential leasing advantages.
Across the cities studied, buildings meeting at least one environmental standard consistently attracted higher rents. The finding is an association across a broad sample, not a guarantee that a specific upgrade will produce a particular return. Building location, tenant demand and the local supply of comparable space can all shape what owners are able to charge; the source analysis specifically adjusted for age and size.
Tenant demand and financing shape the case for upgrades
Corporate tenants are seeking greener offices partly to meet their own sustainability reporting requirements. Askounis said businesses want to prepare property portfolios for tighter requirements and rising energy costs. That demand can support landlords’ renovation decisions, especially where tenants place value on buildings with lower energy needs and stronger environmental credentials.
The premium figures, however, differ sharply by market. Hong Kong’s 23 per cent average stands well above London’s 11 per cent and the single-digit results in Chicago and New York. In the United States, Sarah Brooks, an associate director at Savills World Research and co-author of the analysis, said certifications may not be presented to occupiers as prominently as they are in Europe. Green features there may be treated as one part of a broader building offer.
For property owners, the useful question is therefore local: whether prospective tenants will pay more for the specific improvements under consideration, and whether longer leases or financing benefits help offset their cost. Singapore’s result suggests that where green standards are already expected, maintaining that baseline may matter more than earning a distinct premium. In Hong Kong and London, the reported rent gaps offer a stronger signal of tenant willingness to pay, though the outcome for any one project remains uncertain.
