Green real estate is now a business imperative, not an attractive add-on

In Asia Pacific, sustainable buildings are no longer a niche offering or a value-added bonus. Instead, they’ve become a fundamental requirement, according to a new survey form the CBRE Asia Pacific Research and the U.S. Green Building Council (USGBC) North Asia Office. Tenants now expect energy-efficient infrastructure, low-carbon operations, and smart environmental features as standard. 

The report, titled “Asia Pacific Real Estate Chief Sustainability Officer Survey,” surveyed landlords (real estate companies that own and lease out properties) and investors (those who purchase properties for returns) to assess progress toward net zero, identify obstacles, and uncover emerging strategies.

Sustainability as the new standard

According to the report, over 60% of the Chief Sustainability Officers (CSOs) surveyed reported that they received pressure from tenants, who want to meet higher sustainability requirements in their day to day operations.

This expectation isn’t just coming from tenants. Investors too are becoming more aggressive in their sustainability expectations. A majority now aim for at least 80% of their portfolios to be green-certified, with many taking steps to either acquire certified assets or retrofit existing ones to meet environmental benchmarks.

As green-certified buildings become more widespread, the notion of a “green premium” is also fading. In mature markets like Australia, Japan, and Singapore — where green building adoption has reached 80% — tenants are no longer willing to pay extra for sustainability, as they view it as standard. In less developed markets, where sustainable options are still limited, some premium remains, though that window will only narrow.

Rather than focusing on attempting to restore green premiums, the report emphasises that landlords should prioritise long-term competitiveness, higher occupancy, and attracting and retaining high quality tenants. To do so, sustainable infrastructure is the way forward. 

How businesses are reacting

To meet evolving expectations, sustainability leadership is becoming more entrenched in real estate organisations. Nearly 90% of surveyed landlords and investors now have a dedicated CSO, with 70% of these roles being full-time. A majority of these roles have existed for three years or more, suggesting that sustainability has been integrated as a core business function.

This is also reflected in the goals of businesses. Most real estate landlords and investors are aiming to hit net zero operations by 2050, with 70% of those in Australia aiming to do so by 2030. 

“The path to net zero is complex, requiring both ambition and pragmatism,” stated Jing Wang, Vice President of USGBC North Asia. 

“Amid a rapidly evolving global sustainability landscape, it is crucial for asset owners to navigate diverse policies and regulations, collaborate with tenants on data transparency, and harness technology to drive progress.”

Prioritising ROI

However, while these targets are ambitious, companies don’t seem as inclined to invest in them. 60% of companies surveyed don’t plan to expand their sustainability team, with only 35% of all companies intending to increase their budgets to achieve their goals. 

This may be linked to issues in business alignments. The survey identifies that financial benefits are now seen as the largest priority for sustainability investments. In the previous report done by CBRE Asia Pacific, companies were willing to invest in green measures for the sake of carbon reduction. However, in the present day, CSOs report having to demonstrate financial return in order to attain approvals for their projects. Sustainability is being assessed through the lens of cost-efficiency and value creation, rather than intrinsic environmental good.

This trend reflects a broader shift toward aligning environmental and economic objectives. Energy efficiency remains the top strategy — not only because it reduces emissions, but because it cuts operational costs. Meanwhile, grid connections to renewable energy sources have surged in popularity as these options become more accessible across the region.

Aside from business goals, which often shift, another barrier that businesses face is existing city infrastructure. The carbon intensity (amount of carbon dioxide produced per unit of electricity generated) in the APAC region is higher than in Europe and the United States. Therefore, many buildings in APAC are limited by what their city’s infrastructure can produce, no matter how many sustainable facilities they may implement. 

Fortunately, within this, there are positive indicators of city infrastructure improving, with countries stepping up their investment into renewables and reducing use of coal, creating greater energy security and reduced carbon intensity. This is particularly the case in Mainland China, Japan, and Korea.

Adapting and overcoming

To overcome the financial hurdles, many investors are turning to green finance. About 77% of asset owners are using sustainability-linked loans, while 67% are tapping into green loans. These funds are often directed toward retrofitting older buildings, scaling up renewable energy, or acquiring certified assets — all of which contribute to achieving net zero targets.

Ultimately, the report suggests that ambition must be matched with pragmatism. Many of the biggest hurdles to net zero, such as policy gaps, data availability, and infrastructure limitations, cannot be solved by asset owners alone. Instead, they require alignment across tenants, regulators, and service partners. 

“Our findings reveal an Asia Pacific real estate sector determined to achieve its net zero targets even as market uncertainty persists,” said Ada Choi, Head of Research, Asia Pacific, for CBRE. 

“CSOs are increasingly tasked with delivering both environmental and economic value, balancing increasing risk and tenant demands with financial realities. The focus on energy efficiency and the growing integration of renewable energy sources, supported by innovative green finance, are critical steps.”

With the present state of the real estate industry, the green building of today has gone beyond being just a structure. Those who thrive amidst the changing expectations will be the ones who move fastest to align financial planning, operational upgrades, and tenant engagement with a long-term sustainability vision.