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14


The impact of sustainability on value


Leasing velocity


Performance is also about reducing void periods on initial letting. Our analysis suggests that the payback for investors who target higher ratings is through shorter void periods through the cycle.


Analysis of leasing velocity of 120 schemes completed between 2013-2017 shows that the schemes that have a higher BREEAM rating tend to show a higher pace of leasing and have lower void rates at 12 months and 24 months after completion.5


The relatively few BREEAM Outstanding offices are more likely to be pre-let than buildings with lower ratings and have all been almost fully let on completion compared to circa 50% of lower rated buildings.


In most cases the BREEAM Outstanding rated buildings are located away from the core - for example the White Collar Factory in Shoreditch, the buildings in Pancras Square, King’s Cross and 2 Redman Place, Stratford. These buildings do not have any comparables as they set a new benchmark in terms of the quality and specification within these maturing markets.


Leasing velocity - schemes completed 2013-2017 100%


10% 20% 30% 40% 50% 60% 70% 80% 90%


0%


Outstanding Source: JLL


Excellent


Very Good Includes new build and major refurbishments.


Average of off-site


Let during construction (>24 months)


Let during construction (18-24 months)


Let during construction (12-18 months)


Let during construction (6-12 months)


Let during construction (0-6 months)


Post-PC


(0-6 months) Post-PC


(6-12 months) Post-PC


(12-18 months) Post-PC


(18-24 months)


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