INTERNATIONAL BUSINESS COMPANIES INCREASE DEMAND FOR "GREEN" OFFICES IN CYPRUS. IN THE LONG TERM, THEY ARE MORE BENEFICIAL

International business companies prefer "green" offices when deciding to relocate their business to Cyprus or open branches on the island. They have high requirements for the buildings in which they plan to work and move their staff. As Phileleftheros notes, this has led to the following trend in the Cypriot real estate market: old buildings remain in low demand, while new ones see demand exceeding supply. This contributes to rising prices for the sale and rental of new offices.

— The Cypriot real estate market has fully recognized the necessity of constructing new buildings or upgrading existing ones based on criteria of stable power supply, reduced environmental pollution, and sustainable development, since the existing office stock is significantly outdated and does not meet the needs of today's users, — explained Panos Danos, Managing Director of Danos and Associates, to the publication.

— Currently, there is demand [for offices], mainly from multinational corporations, where the first requirement is the presence of [green] certification. This is why we see that the vast majority of new projects are adapting to this requirement. On the other hand, investors have obligations that force them to adapt to new requirements based on ESG* criteria.

* ESG (Environmental, Social, and Corporate Governance) refers to a company's environmental, social, and corporate governance practices.

When planning their activities, companies have started to take into account long-term environmental, social, and governance risks. When buying or renting offices, business representatives consider not only the cost of purchase or rent but also maintenance and utility costs for electricity and water. Having green certifications helps reduce these expenses.

According to Panos Danos, with higher initial costs for constructing office buildings that consider ESG criteria, energy consumption can be reduced by 30-40%, water consumption by 10-30%, and maintenance costs by 10-15%. In the long term, this results in cost savings of up to 20%. Therefore, according to the Managing Director of Danos and Associates, companies can afford to rent offices at 10-20% higher rates provided they have green certifications.

— Moreover, many companies are required to adhere to ESG criteria according to their corporate policies, — Panos Danos reminds us.

In addition, better working conditions in offices help companies attract new talent.

Investors who invest in the local real estate market demand that Cypriot developers ensure the buildings under construction have all necessary environmental and energy certifications and that new projects take ESG standards into account.