Real Estate Investor Magazine South Africa September 2013

IMPROVING BY CATHERINE PATE Fast Facts The benefits behind your green building G lobally, the built environment is responsible for one third of all green house gas emissions/carbon emissions and energy eff iciency and introducing more renewable sources of energy is a current priority for South Africa as it faces a medium-term national power supply shortage and steeply rising electricity tariffs. Green building presents the simplest, most-immediate and single largest opportunity for greenhouse gas abatement, outstripping energy, transport and the industrial sectors combined. The movement is an opportunity to use resources efficiently and address climate change while creating healthier and more productive environments for people to work and live in. Lower operating costs Research reveals that Green Star SA buildings enjoy energy savings of between 25% and 50% compared to buildings designed to SANS 204 standards. The payback periods of energy and water saving practices are becoming much shorter as a result of increasing utility costs and the wider availability of more affordable green building technology. Higher returns on assets Extensive studies in the United States and Australia have shown rental rates in green buildings to be approximately 6% and 5% higher, respectively. Increased property values Decreased operating costs, lease premiums and more competitive, less risky, future-proofed buildings contribute to the value of green buildings. This has been empirically proven in the United States and Australia with 11% and 12% valuation premiums, respectively. Enhanced marketability Green building creates a differentiated product in the market, which is viewed as technologically advanced and environmentally and socially responsible. These attributes are positively linked to the company brand and image of the owner and/or the tenant. Increased productivity Improved internal environment quality (IEQ) from increased ventilation, temperature and lighting control, the use of natural light and the absence of toxic materials result in the improved health, comfort and wellbeing of building occupants. This has been shown to increase productivity – always a significant factor in the profitability of a business. Studies show improvements in productivity of up to 20% which easily covers any premium paid for higher quality green space. Reduced liability and risk Green buildings are future-proofed against increases in utility costs, potential energy and water supply problems, tightening legislation, carbon taxes and the impact of mandatory energy efficiency disclosure, as well as costly retrofits or even obsolescence. Sustainability risk factors can significantly affect the rental income and the future value of real estate assets, in turn affecting their return on investment. Retaining government and other major tenants The Department of Public Works’ planned ‘Green Building Framework’ is likely to include certain green building requirements for government accommodation. This will increasingly apply to large multi-national tenants too. Responsible investing Investment in green building is an integral part of the worldwide trend to more responsible, sustainable and ethical investing. As investors and occupiers become more knowledgeable about and concerned with the environmental and social impacts of the built environment, buildings with better sustainability credentials will have increased marketability. Additionally, there is a demonstrated link between the green characteristics of buildings and the ability of these buildings, in some markets, to more easily attract tenants and to command higher rents and sale prices. Attracting and retaining talent Skilled staff members are hard to attract and retain. However, educated people, particularly younge ???????????????????????)??????????????????????????????????)?????????????????????????????????)???????????????????)5?????????????)\????????????????????????????????????????)???????????????????????????????????)????????????????????????????????????????)??????]??????????????M??????????????????)????????????????????????????????????)??????????????????????????) ??????????????????)???????????????????????????????????????)????????????????????????????????????????)????????????????????????????????)%????????????????????????????????????+??? ???????????????????????????????????)??????????????????????????????????)???????????????????+??????????????????????????????????????????+???U????????????????????????????)???????+???I?????????????????????????????????+???]??????????????????????????????????)?????????+???U???????????????????????+???M???????????????????????????????????)???????????????()IM=UI L) M()??????????????()M???????????M?I????????%?????((??((

Real Estate Investor Magazine South Africa September 2013 | Page 45