Analysis: Wellness emerges as a key consideration in commercial real estate

Analysis: Wellness emerges as a key consideration in commercial real estate

Keith Doyle

Keith Doyle, senior associate at BHSM LLP, examines an accelerating trend in the commercial real estate sector towards taking wellness seriously.

Awareness of health and wellness, in society at large and in our places of business, has reached an all-time high. Even before Covid-19, the world of business and by extension those concerned with the development, occupation, letting, acquisition, disposal and operation of commercial real estate had begun to appreciate and respond to the importance of wellbeing among employees and other end-users of their buildings.

It is increasingly understood that wellness is a tangible and even critical factor in the bottom line of a business and its ability to attract and retain talent. As noted in a recent report by the Harvard Business Review Analytics Services, “the payoff of more meaningful work is significantly better business performance”.

A healthy workforce reduces sick leave and staff turnover while boosting productivity and commercial tenants increasingly demand that attention to detail in the buildings they occupy is conducive to these goals, with wellness certifications in turn helping to attract tenants, buyers and investors to real estate projects.

The International WELL Building Institute (IWBI) has been at the forefront of wellness certification in recent years and the WELL Building Standard became the first building standard with a primary focus on the health and wellbeing of people in buildings (version 1 launching back in 2013), a simple concept with complex implications for how buildings are fitted out, operated and resourced. This focus on wellness may be distinguished from, and seen as complimentary to, LEED certification, which traditionally focuses on environmental or green standards at the level of construction of the shell and core as well as internal fit outs, rather than wellness per se.

In the Irish context, February 2018 saw Arup’s office premises at Albert Quay, Cork, become the first project in Ireland to achieve the WELL Certification (V1). A quick recital of the measures implemented to achieve this certification is instructive: air flow simulation to eliminate downward drafts; sensor kits installed to record and track air quality; fit out of spaces to enable and encourage employees to work in a variety of locations postures and environments; acoustic design to minimize background noise, with provision for focus rooms and break out spaces.

Arup reported a number of benefits arising from the implementation of these measures, including a 25 per cent improvement in staff performance. It was also noted that wellness certification placed ARUP at a competitive advantage in offering advice to clients who in turn were interested in adopting wellness certification at their premises.

In May of 2021, Iconic Offices, one of Dublin’s leading flexible workspace providers, obtained WELL Certification Version 2 for the Lennox Building in Dublin city, in the process becoming the first certified flexible workspace in Europe. Iconic Offices noted that in achieving the WELL V2 standard, every element of the working day from ergonomics to heating, natural light, air quality, interior planting, wellness events, water quality measures and nutritional initiatives, among other elements, had been considered and reimagined during the process.

WELL V2 is a refinement of the original WELL Certification focusing on 10 concepts (air, water, nourishment, light, movement, thermal comfort, sound, materials, mind, community) with mandatory elements and a vast array of optional optimisations (97 in total) beneath this feeding into a points based certification system, verified through site testing.

The Irish Business and Employers Confederation (IBEC) has also demonstrated leadership in the Wellness certification sphere in Ireland, with the introduction of their own Keep Well Mark, another evidence-based accreditation. The Keep Well Mark requires auditing and benchmarking against a defined set of standards, following which the applicant is directed towards policies and practices to improve the health and wellbeing of employees, with accreditation valid for two years subject to a mid-term progress check in.

In the same vein, the Irish Small Firms Association (SFA) has launched a Workplace Wellbeing Award for smaller businesses in Ireland in order to recognise companies of all sizes who are serious about progressing the welfare of their staff through programmes specifically designed for peoples’ wellbeing.

Whereas initiatives such as WELL certification existed in the years immediately prior to the Covid-19 pandemic, it is beyond question that this unprecedented crisis has focused minds and recalibrated priorities for wellness to fully adapt to the prime objective of keeping employees safe from infection at this time and into the future.

One directly Covid-19 inspired initiative led by IWBI in response to this crisis has been the Health-Safety Certification, designed to enable users to prepare their spaces for re-entry in a post-Covid-19 society and aiming at specific interventions at building and organisational level to help reduce risk of transmission, albeit the measures provided for are necessarily broad reaching in health and safety impacts beyond Covid-19 itself.

This certification focused on six main themes, including cleaning and sanitization procedures; emergency preparedness programmes; health service resources; air and water quality management; stakeholder engagement and communication; and innovation. Demonstrating leadership in the Irish market, IPUT, in October of 2021, became the first Irish landlord to be awarded the IWBI Health-Safety Certification for their directly managed properties.

Wellness certification is an attempt to self-regulate the industry and allows employers and their landlords to offer a unique selling point, while also placing themselves ahead of the curve on arguably inevitable legislative interventions in this area in the years to come. As noted by one commentator, “going forward the corporate world and thus the commercial real estate industry that serves it will have no choice but to prioritise wellness and building health because tenants will demand it [… and] laws may even require it”.

The Irish government has already indicated their agreement in principle with an opposition bill aiming to bring the right to clean air into workplaces across the country. This is surely only a sign of things to come.

This article is for general information purposes. Legal advice must be obtained for individual circumstances. Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.

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