Tenant Wellness- Driving Investment Returns

Patrick Cooper of Preston Rowe Paterson Sydney believes that tenant retention is fundamental in today’s market. Landlords and property owners are moving towards incorporating tenant wellness features into existing and new office spaces to modernise the ongoing tenant experience in office assets.

In recent times, more time has been invested into acquiring a deeper understanding of what underscores a company’s approach to people, the culture of the workplace as well as the health and wellbeing of the tenants in their building. Preston Rowe Paterson Sydney notes that the features of wellness in commercial buildings encompass both the quality of indoor conditions and the mental and physical health of their tenants, as discussed below.

Indoor Environment

When determining the quality of a building’s indoor environment, factors often looked at include air quality, thermal conditions, noise levels and the layout of the working space. A 2016 study from the NSW Office of Environment & Heritage on the impact of NABERS Indoor Environmental rating tool reveals that a building with a good indoor environment is positively correlated with occupant comfort and satisfaction. In conjunction with this, research from the Investment Property Databank suggests that buildings with higher NABERS ratings have higher returns and lower vacancies. This in turn leads to higher market valuations, making the pursuit to increase sustainability beneficial for all landlords.

(Source: https://nabers.gov.au/NabersResources/pdf/IE/NABERS_IE_Guide_2015-Oct.pdf)

Tenant Health

The contemporary nature of the workplace has driven landlords to utilise technology and building amenities to improve the mental and physical health of all occupants of their buildings. The continued influence of technology on the property industry now allows landlords to easily facilitate the engagement between tenants and the building’s services, as well as accurately and advantageously curate the services provided to better suit their tenants. Preston Rowe Paterson also notes the continuing importance of building amenities in allowing landlords to attract potential tenants. Amenities such as safe bicycle storage, day care services, car maintenance, dry cleaning and fitness facilities all allow tenants to alleviate some of the stress in their tenants’ lives. Adjustments to a building’s amenities aimed to improve the overall quality of life of tenants are a big step towards tenant wellness; although we reiterate the importance of a communication tool and innovative technology in order to facilitate the transfer of information between landlords and tenants.

The WELL Building Standard

The WELL Building Standard is the world’s first assessment method created to certify buildings designed and operated to promote occupant wellness. The standard is made up of seven categories: Air, Water, Nourishment, Light, Fitness, Comfort and Mind. These categories are then measured and used to certify the impact of the built environment on the health and wellbeing of its occupants. The standard is grounded by a body of medical research that delves into the connection between the buildings in which we work and the health and wellness impact on occupants. With the contemporary trend of employers investing more into health-driven lifestyle and quality work spaces to improve the health of their employees, the WELL Building Standard will become a major factor taken into consideration for potential tenants. Preston Rowe Paterson notes the potential for this standard to have a direct impact on productivity, as it can dramatically affect staff turnover, absenteeism and the healthy culture of companies.

WELL Building Standard Features, Parts and Requirements

105 Features encompasses seven concepts mentioned above; with each feature intended to address specific aspects of occupant health, comfort or knowledge. Furthermore, each feature is divided into parts and tailored to a specific building type. According to International WELL Building Institute, features can be:

  • Performance-based standards that allow flexibility in how a project meets acceptable quantified threshold, or
  • Prescriptive standards that require specific technologies, design strategies or protocol to be implemented

Figure 8: The Seven concepts of the WELL Building Standards- Source: International WELL Building Institute

Figure 9: WELL Certification is achieved when projects successfully demonstrate the achievement of all Preconditions. Since health and wellness objectives vary from one building to the next, WELL provides flexibility when selecting features that best suit the project owner’s goals- Source: International WELL Building Institute

According to a study on workplace management by Zurich University of Applied Science, energy efficient office buildings do not always correlate with a better workplace. This is because a building’s exterior is not the only factor contributing to user comfort. A physical work environment with good amenities, natural light, thermal comfort and minimal contaminants also assist to enhance job satisfaction, which in turns, correlates with higher productivity. In saying this, landlords and property owners in Australia are beginning to buy real ambien online pursue new voluntary standards to promote tenant wellness, alongside the now conventional sustainability standards. Preston Rowe Paterson continues to embrace the importance of creating a sustainable work environment in order to maximise the value of the workplace, which inevitably will boost organisational performance and at the same time minimise the impact on the planet.