Real Estate Investor Magazine South Africa August 2013 | Page 15

UPFRONT
1. Efficient buildings
The mega trend towards more efficient buildings
encompasses two distinct elements: the shift to
“greener”, more resource efficient buildings, as
well as a distinct move towards advanced facilities
management. Property owners and landlords on
the cutting edge of this trend enjoy a competitive
advantage in a tough market: the ability to offer
tenants reduced operating costs and streamlined,
efficient building management that controls
ownership costs.

of the Green Building Council of South Africa
(GBCSA) has not only highlighted the benefits
of this trend but has helped the property sector
to align themselves with it. Over many years of
research across many buildings which we value
and assess, we have found a significant difference
between the operating costs of standard and green
buildings.”

Given that buildings contribute 38% of all
human greenhouse gas (GHG) emissions, the
property industry will be among those industries
most affected by the introduction of carbon taxes.
And, as buildings consume some 40 - 50% of
the world’s energy, commercial property owners
will certainly feel the impact of carbon taxes
directly as Eskom passes the carbon tax imposed
on it through to the end users, at an estimated
5c/kWh. Even if landlords pass this additional
cost onto their tenants, the repercussions can be
significant in a tough rental market. Commercial
property developers will also be affected in terms
of building materials – notably cement, on which
the carbon tax cost will be an estimated R1.50 to
R3 per bag, depending on the grade.

STANDARD
OPERATING COST
(per square metre)

GREEN-BUILDING
OPERATING COST
(per square metre)

Regional retail

Such a competitive advantage is particularly
important in the current market, with rising utility
costs becoming a major issue for tenants, while
owners also face property costs that are increasing
well in excess of inflation rates. Property owners
will soon also face a new cost challenge: carbon
tax.

BUILDING TYPE

R47

R33 - R38

Community retail

R36

R27 - R31

High-rise offices

R27

R15 - R20

Low-rise offices

R19

R12 - R15

Industrial mini-factory

R14

R8 - R11

Source: Courtwell Consulting
Smith adds that while this trend is most
noticeable among premium listed and private
equity property funds, smaller property funds
can become part of the trend towards greener
buildings by taking cognisance of the information
published by the GBCSA and engaging
professionals aligned to green principles.

Given these realities, the generally accepted
three to five percent premium on building a fivestar green building, as well as the costs involved
in retrofitting existing buildings with resource
efficient technologies, is certainly starting to make
financial sense.

Similarly, facilities management is rapidly
emerging as a key contributor to containing
costs and achieving savings – while enhancing
the value of commercial property. According
to Marna van der Walt, CEO of Excellerate
Property Services: “The integration of effective
facilities management in the commercial property
sector has an increasingly relevant role to play, not
only in addressing energy saving, waste recycling
and minimising the use and pollution of water,
but also in regard to green issues during both
the construction and use phase of a building.
By reducing operating costs landlords have the
potential to achieve a higher rental rate while
keeping the tenant’s occupation costs unchanged
and also helping retain tenants.”

“The additional capital outlay to develop more
energy-efficient buildings, or to convert existing
buildings, is recouped within the first two to three
operating years and, thereafter, landlords, tenants
and the environment benefit from the savings in
costs and emissions,” comments Jonathan Smith
of Courtwell Consulting. “Our findings are that
property funds and major developers are including
as many green features as possible within their new
and existing buildings and that tenants are acutely
aware of the benefits of housing their businesses in
a green or semi-green building. The establishment

“The current emphasis where facilities
management can add significant value is in
helping property owners and tenants to address
wasteful and unnecessary practices which
have a negative impact on the environment,”
says Sulayman Abdullah, CEO of Excellerate
Facilities Management (EFM). “This provides
a tremendous opportunity for the astute facilities
manager. Action steps with regard to energy
saving, waste recycling and minimising the
use and pollution of water are simply no longer
sufficient. Facilities managers are expected to

www.reimag.co.za

provide guidance and to implement action steps
on the full spectrum of green issues during the
construction and use phase of a building.”
He says the starting point is the acknowledgement
that during their lifecycles, buildings use a
significant amount of natural resources, and the
‘use’ phase of a building’s lifecycle accounts for as
much as 85% of its total impact on the environment.
As a result, facilities managers have the opportunity
to implement strategic plans for buildings under
management, partnering with landlords to compile
appropriate action ??2??&Vv&BF?V?W&w?6f??w0??v??6???GW&?v???VffV7B6f??w2f?"??F??&G20?vV??2FV??G2?"?gWGW&R??g&7G'V7GW&RFWfV???V?@?v?fW&??V?B( ?2f?7W2????g&7B"V7BR&P?FWfV???V?Bv????6?6?v??f?6?F?6??vP?F?R??G66R?bF?R6?V?G"??&?W'B???v?W'2?B??fW7F?'2v???F?vV??F?F?P???FR?bF?R???r?FW&?VffV7G2F?W6R?Wp???g&7G'V7GW&RFWfV???V?G2v????fR??F?P?7F??FWfV???V?B?b6?F?W2?B'W&?&V2??'F?7V?&???&V?F???F??72G&?7?'B??f6VBv?F?&?6??rgVV?6?7G2???v???rG&ff?0?6??vW7F????BF?R&??6VB?WrF???2???????W6'W&~( ?2'W6??W726V7F?"6??F??VW2F??f?7W2???ff?6R66????FF???v??6?V?&?W0?FV??G2F??VWBF?V?"&WV?&V?V?G2f?"6V7W&R??V?G?76R6?W?VBv?F?6??fV??V?6R?`???6F???f?"V7?66W72f?"7Ffb?B6?V?G2??6?2???F?????V???V6??r?B6?W2'&??W ?f?"???&?W'F?W2??vWFV?r?( ??7&V6??v??vR6VRF?BF?RV??6?2?'F?7V?&????p?'W6??W76W2v?F??&vR7Ffb6???V?V?B??0???'V??F??w26?GVFVB??6??fV??V?B??6F???0?v?F?v??B??g&7G'V7GW&R?B66W72F?V&?0?G&?7?'B?F??2?2&V6???r??&RWf?FV?B?@?&?6??rgVV?&?6W2?BF?R&??6VBF???7?7FV??( ??R6?2?????&?6??fb??B?b???&?W'F?W26?3??( ??F?R??GW7G&??&?W'G??&?WB?G&?7?'@??77VW2&R?f??r6?v??f?6?B??7B??F?P?6???6R?b??6F?????BV7?66W72F???? ?G&?7?'B&?WFW2&RWfV???&R??W&F?fR&V&??p?????B??v?gVV?6?7G2?BvWFV?~( ?2R?F???2??6W'F????FW2&V???6?Vv?BgFW"?W7V6????G&F?F??????V?"??GW7G&??&V2v?F?v??@???g&7G'V7GW&R?B66W72F?G&?7?'B&?WFW2?( ?( ?V&?2??g&7G'V7GW&RFWfV???V?B?2?&V6?v??6VBV6????27F??V??Bf?"&?fFR6V7F? ???fW7F?V?B???&V?F??2?2'F?7V?&??VwW7B#24&V?W7FFR??fW7F? ??0??