LONDON, March 19 (Reuters) - Demand for environmentally

friendly buildings is set to increase strongly over the next two

years as companies with emissions reduction commitments see

their leases come up for renewal and seek a greener alternative,

real estate company JLL said.

WHY IT'S IMPORTANT

As more companies commit to reach net-zero emissions by

2050, most will be looking to cut those tied to their offices

and factories, yet demand for low carbon buildings is set to

outstrip supply.

KEY QUOTES

"Time is of the essence for the real estate industry," Guy

Grainger, JLL's Global Head of Sustainability Services and ESG,

said.

"We are in a new world where inaction over decarbonisation

will see investments fall into economic obsolescence in the

coming years. While for real estate tenants, this growing need

to show progress against carbon commitments will lead to price

friction and a race for low carbon buildings."

CONTEXT

The number of companies committing to reach net-zero

emissions across their business by 2050 has surged in recent

years, with 7,600 companies worldwide signed up to the Science

Based Targets Initiative.

One out of every three leases tied to a carbon commitment

will expire in less than 24 months. Average leases are 7-10

years, meaning many will be live at 2030, a key interim

assessment point for many companies' targets.

BY THE NUMBERS

- For every three square meters of global demand, less than

one square meter is being developed.

- Only 30% of future demand for low carbon workspace is

projected to be met by 2030. In London, low carbon demand is

expected to exceed supply by 35% by 2030, in Paris this rises to

54%. In New York, an estimated 65% of demand will not be met.

- Around 25% of existing office stock is at risk of becoming

functionally obsolete in the next five years.