Real Estate Investor Magazine South Africa September 2013 | Page 45
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
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