European offices and logistics most shielded from energy shocks

Lenka Pechová, Senior Research Analyst at Savills CZ&SK, says: “The international real estate advisor estimates that the share of energy costs reflects 2 to 4% of the total expenses for occupiers in the two sectors. Staffing is responsible for more than 50% of the total costs for office occupiers and the combined outlays for transport and labour accounts for more than 75% of the total costs for warehouse occupiers. Manufacturing companies are more affected by the increase in energy prices due to higher consumption.”

Retailers generally consume larger amounts of energy and are not always able to pass the costs on to customers while data centres and the life science industry are heavily reliant on energy. Water cooling also has a big impact in data centres. On average, a single data centre uses 26 million litres of water each year, per megawatt of data centre power. As a result, water will become increasingly important when deciding where to build a new data centre.

However, power usage effectiveness (PUE) in data centres is continuously improving and current operators are exploring more alternative and greener sources of energy supply such as on-site hydrogen fuel cells which could also be introduced to the life science sector. In March 2023, Google announced that it is working on new cooling technologies that could dramatically reduce the use of water in their data centre operations to cut its water usage by 50 per cent.

Retailers could consider other (smaller) solutions such as lowering temperatures in their shops, turning off the lights outside opening hours and/or closing their doors. Research from Cambridge University shows that shutting shop doors in winter reduces energy usage and carbon emissions by up to 50%.

Bram de Rijk, European Research Associate at Savills, says: “Europe is currently strongly positioned to counter the impact of the energy crisis as a result of the mild 2022-23 winter, the reduction in gas consumption, and stocking up on gas levels. However and although we entered the meteorological spring with warmer temperatures ahead of us, the resilience to the energy crisis will be truly tested in the next winter when governments are perhaps less capable and/or willing to spend as much capital to support households and businesses, especially if next winter turns out to be colder for a longer period.”

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