The Czech office market is not yet able to adopt the criteria for the construction of environmentally and socially responsible (ESG) offices, Colliers said this in its analysis. According to its estimates, this type of energy-sustainable offices will have rents up to 50 percent higher than buildings with classic green certification. Investors want to build ESG-certified offices because of the subsequent lower financial costs of energy consumption. At the same time, the certification also allows them to obtain, for example, a more advantageous loan.
ESG certification shows how a building or office affects its surroundings and how it affects the health and well-being of the people who live or work in it. The different certifications vary depending on the focus area, whether environmental, social or governance, and whether they are applicable to new or existing buildings.
“The Czech real estate market is not yet fully prepared for the new needs of companies, and due to the lengthy approval processes for new construction we cannot expect a quick correction. Multinational companies are already actively demanding office space that complies with modern requirements for materials, renewable energy, carbon footprint, waste management, healthy working environment and water efficiency,” said Jana Vlková, Director of Workplace Advisory and Office Agency at Colliers. She added that other companies will have similar requirements for office construction.
New rules on non-financial reporting on ESG compliance approved by the European Commission will start to apply next year. Listed companies and those with an annual turnover of one billion crowns, assets of more than 500 million crowns and more than 250 employees will be required to report.
In the Czech Republic, the first offices meeting the maximum ESG standards will be built in 2027 or 2028, with Skanska’s PORT7 project in Prague-Holešovice and Crestyl’s Hagibor on the border of Prague’s Vinohrady and Strasnice districts.
