Next-Generation Office Strategies

Japanese version available here

Introduction

In recent years, the domestic and international office markets have been on a recovery trend following the COVID-19 pandemic, and particularly in Tokyo, the supply-demand balance remains healthy, with a growing willingness among companies to invest in human resources and to improve workplace environments. The competitive axis for office buildings has evolved from “location and rent” to “comprehensive value creation,” with greater emphasis now placed on soft aspects such as environmental performance, disaster resilience, comfort, and convenience, making non-energy benefits such as health and productivity improvement, as well as BCP, important factors in investment decisions.

In the real estate sector, obtaining ESG certifications is becoming increasingly common, with certifications such as LEED, BREEAM, and WELL expanding to evaluate not only environmental performance but also health, well-being, and management systems. In Japan, certifications such as CASBEE, BELS, and DBJ Green Building are becoming more widespread, and are increasingly utilized by companies and property owners conscious of ESG investment. These certifications are strengthening their role in evaluating not only environmental performance but also social value and governance, thereby contributing to sustainable value creation.

This report focuses on NEBs (Non-Energy Benefits), which are the additional effects gained from energy efficiency and decarbonization initiatives beyond energy savings. NEBs encompass a variety of benefits, including health promotion, enhanced intellectual productivity, reduced maintenance costs, community contributions, branding, reduced carbon emissions, environmental certification and rating acquisition, business continuity planning (BCP)/risk avoidance, talent acquisition and retention, internal awareness, financing, advertising and promotion, and property value enhancement. These tools provide a more comprehensive visualization and quantification of a building's value—value that could not be fully assessed by traditional utility cost savings alone.

Furthermore, enhancing of NEBs directly contributes to the improvement of asset value through increased tenant satisfaction and productivity, improved occupancy time, higher rent premiums, higher renewal rates, reduced cancellations and vacancies, shorter leasing periods, and stabilized occupancy rates. It also contributes to cost reductions n maintenance, repairs, and insurance premiums, achieving stabe cash flow, improved capital efficiency, and reduced risk.

This report presents specific examples of how NEBs contribute to increasing building value and shortening investment payback periods through quantitative evaluation methods and actual new construction and renovation cases. For companies and investors aiming to enhance the value of office buildings and real estate, the evaluation and maximization of NEBs will be a key to strengthening competitiveness and achieving sustainable management, as demonstrated from both theoretical and practical perspectives.

Takaumi Tamura
Partner
Deloitte Tohmatsu Consulting LLC

Ayumu Shimizu
Director
Deloitte Tohmatsu Consulting LLC

Yuichi Sunaga
Senior Manager
Deloitte Tohmatsu Consulting LLC

Table of Contents

Chapter I　Changes Impacting Building Owners & Building Funds

1. Domestic Office Market and Next-Generation Strategies
   
2. The Importance of Green Buildings Utilizing Real Estate ESG Certifications
   
3. Expanding Investment in Green Buildings
   Shift from Green / Energy Efficiency to Comprehensive Value

ChapterⅡ　Definition of NEBs and International Trends

1. What are Non-Energy Benefits (NEBs)?
   
2. International Initiatives for NEBs Evaluation
   
3. Development of NEBs Indicators as a Quantitative Evaluation Method

ChapterⅢ　Mechanism by Which NEBs Contribute to Value

1. Mechanism by Which NEBs Contribute to Asset Value
   
2. Case Study (New Construction – Tenant Building)
   
3. Case Study (New Construction – Owner-Occupied Building)
   
4. Case Study (Renovation – Owner-Occupied Building)

ChapterⅣ　Solutions of Deloitte Tohmatsu Group

1. Supporting the Strategic Utilization of NEBs with an Assessment of a Company’s Management Challenges
   
2. NEBs Quantitative Evaluation and Enhancement Support
   
3. Providing Sustainable Solutions Utilizing Real Estate ESG Certifications
   
4. Supporting the Advancement of ESG Activities