_What are the benefits of social value for landlords and occupiers?
In the built environment, social value is created when buildings, places, and infrastructure support environmental, economic, and social wellbeing. In turn, this improves people's quality of life. By assessing the social value of their buildings and activities, building owners, property managers, and occupiers can improve their impact on the environment. Social value also enables investors to factor these benefits into their investment decision-making.
How does social value impact occupiers?
Occupiers are increasingly seeking accommodation that not only meets their functional needs but also supports their broader goals, including attracting and retaining top talent to maximise efficiency and profitability. A key part of this strategy involves fulfilling their Environmental, Social, and Governance (ESG) agendas.
Modern occupiers are looking for properties that offer amenities focused on staff wellbeing, both within the building and in the surrounding community. These can include wellness facilities, green spaces, and community engagement initiatives. Such features are crucial in creating an environment where employees feel valued and motivated, which in turn enhances productivity and wellbeing, plus reduces staff turnover. Occupiers can work in partnership with landlords to develop a community engagement programme to ensure a positive experience for occupiers and the wider area.
Best-in-class commercial office spaces that excel in providing these amenities and meeting ESG criteria tend to have shorter vacancy periods. This means they require lower incentives to attract tenants and command higher rental values. This demonstrates a clear link between the quality of the property and the occupiers' ability to sustain a positive and productive workforce.
Asset managers focus more on employment, working with occupiers and the supply chain to maximise opportunities, and addressing local needs through local community groups.
What’s the benefit of social value for landlords and owners?
Real estate investors and asset owners are under increasing pressure to deliver credible progress against their own social value goals – looking at the “impact” of their investments and activities. Buildings can play a significant role in enhancing place. Property owners and developers have a unique opportunity to drive social value through their real estate, maximising return on investment and future-proof assets while delivering lasting positive impact for communities.
When addressing the 'S' in ESG, the absence of established policy and regulation around social value often leads to it being perceived as a 'nice to have' rather than a 'necessity.' While many organisations have developed robust strategies for the 'E' and 'G' aspects, neglecting social initiatives can hinder their ability to attract occupiers. Investors are now more than ever, drawn to properties that promise secure, long-term income and compliance with regulatory standards. Additionally, buildings that integrate social initiatives and cater to community needs can significantly enhance the property's appeal.
There is a growing trend towards high-specification, environmentally friendly office spaces. Sustainably accredited buildings often experience shorter marketing periods and yield stronger financial returns. Investors are increasingly interested in impact-focused companies demonstrating strong ESG performance, as they tend to outperform their peers over time. This growing interest is driven by the dual promise of financial returns and positive community and societal impact.
Collaboration is key to enhancing social value
Understanding and addressing the needs of a community is essential to maximise social value. To do this successfully, it’s important that occupiers, landlords, building owners and local authorities collaborate, assess and share best practices. Collaboration with local stakeholders helps to foster community engagement and local impact. If all stakeholders work together to identify needs and priorities, they can ensure the most efficient resource allocation and aim for long-term interventions.
How can we support you with social value impact?
Our ESG Consultancy team is equipped to help clients understand, measure, and enhance the social value of assets, at the portfolio or fund level or within the broader company framework.
Please get in touch to learn more about how we can help.