GREEN
REITs
Role in Green Business
Sustainable green buildings set
to grow into better investments
BY BRIAN WILKINSON
A
s large owners of commercial property in
South Africa, the SA Real Estate Investment
Trust (REIT) sector has a central role to
play in furthering good green business in the country.
This is according to the Green Building Council of
South Africa (GBCSA), which emphasises that
green building isn’t only good for the environment,
but good for business and the financial performance
of property assets too.
Last year, in the US, buildings consumed 39% of
the total primary energy generated in the country,
ahead of transportation at 28% and industry at 32%.
Brian Wilkinson, CEO of the GBCSA, comments:
“These shows the massive impact buildings have on
our environment and the potential for extraordinary
energy- and cost-savings that property investment
companies have.”
Wilkinson explains: “Energy-efficiency, which
is an intrinsic part of green building, has multiple
benefits. Besides buildings consuming fewer
resources, it helps minimise utilities bills for tenants,
and green buildings are proven to provide better
returns for owners.”
The first ever IPD South Africa ‘Annual Green
Property Indicators’ - released in October 2014
as a collaboration with GBCSA, provided proof
that energy-efficient buildings offer higher returns
for their owners. The benchmark return for green
buildings was 15,9% versus the 14,2% for the overall
sector. This makes them better investments, and
means that energy-efficient buildings also benefit
REIT investors. Energy and water savings over
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Commercial Handbook 2016
the long-term also mean lower costs, which frees
up more financial resources for building operations
and maintenance, securing the performance and
investor-appeal of assets for the long-term.
Moreover, as listed investments that strive for
good governance, the GBCSA’s Green Star SA
ratings provide REITs with a recognised, externally
verified stamp of approval for a company’s green
building achievements.
The good news is that many of South Africa’s
REITs are not only taking notice of the benefits of
resource-efficient building, but also taking action to
ensure their buildings – new and long-standing –
reduce their environmental impacts.
Wilkinson notes the commitment of SA REITs
t o energy-efficient green building varies widely –
from world-leading contributions on one hand, to
complete disregard on the other.
In the REIT sector, green business is clearly being
led by the larger listed companies like Growthpoint
Properties, points out Wilkinson.
Growthpoint is a founder of the green building
movement in South Africa and is a member of the
Green Building Leader Network – and exclusive
network of select members committed to supporting
green building. Growthpoint leads the way in green
rated buildings in the SA REIT sector with seven
GBCSA Green Star SA rated buildings and 10
registered projects to its name the Existing Building
Performance GBCSA Green Star SA rating.
Wilkinson notes the benefits of green building
increase exponentially with each building certified.
www.reimag.co.za