A thought leadership piece by Manfred Braune – Chief Technical Officer: Green Building Council South Africa
Green buildings win at every turn. Green buildings outperform non-green buildings in every area of benefit, and can even match them on cost.
It has been proven around the world, and in South Africa, green buildings deliver a better return on investment than the non-green kind.
Research by MSCI, released earlier this year, shows energy-efficient buildings are better investments. They deliver total returns 22% above non-green buildings, with green buildings achieving total returns of 12.1%, compared with 9.4% total returns reported by other buildings.
Green buildings have greater occupancy levels, attract a better quality tenant, generate higher net incomes per square metre, deliver higher net income growth, and have higher asset values, compared with their less efficient counterparts.
The benefits of resource-efficient buildings don’t end there. Certified Green Star SA buildings consume around a third less than the legislated minimum for electricity, and half the amount of water. This means lower utility bills for occupiers, enabling businesses to operate with lower costs. It is also a proven way of future proofing your property against increases in electricity and water costs.
South Africa’s first 100 Green Star SA certifications have saved 171 million litres of water a day — the daily water needs for nearly 86-million people. They also achieved the combined annual savings of 131 million kilowatt-hours of electricity, which could power 9,130 households for a year. In money terms, this equates to over R88 million saved on electricity and some R1,5 million saved on water.
The strong financial and business case for green building is supported by critical environmental benefits, and environmentally responsible business practices have become an essential part of good corporate sustainability practice. This boosts the business case for green building even further, making it a business imperative in a competitive organisation.
With all these advantages, green building is an obvious choice, and we’re expecting more and more buildings to be developed this way.
With a growing body of proof supporting the case for resource-efficient buildings, more developers are moving towards green building to be competitive and reap the benefits.
As a developer, if you want to sell your property and potentially fetch a higher price, green building is the way to go. More and more leading property funds are only building or buying efficient buildings, because green buildings support successful leasing, thus driving a property’s financial performance. The listed property sector is clamouring to get more green buildings into their portfolios, and is fully aware they have better returns.
Leading companies want to work in green buildings. They have better internal environment quality, which creates space that typically increases staff productivity and reduces employee sick days.
A company’s return on its salary investment is much better in a green building, compared with a non-green building – and salaries are typically a business’s biggest cost. By improving staff output, green buildings have a significant impact on business.
The argument that green buildings always cost more simply doesn’t hold water. There are several cases of projects that paid no extra capital to develop green buildings.
Development costs depend on how early you start integrating green building into your design. If you plug it in afterwards, it will be more expensive because of abortive costs. Similarly, if you have a gadget-focused design, it will also cost more.
If you integrate green building into your design from the beginning, and incorporate passive design measures, you won’t pay more capital for a green building. Setting up the process of green building right up front, and involving the right professionals is critical to developing a green building without paying more.
* The Green Building Convention, which takes place at the Cape Town International Convention Centre from 2-6 November, includes a focus on the question “Do green buildings cost more”. This session will reveal the results of Green Building Council South Africa research undertaken with the Professional Quantity Surveyors of South Africa, which considers the cost of over 50 green buildings. For more information on the convention or to register go to www.greenbuildingconvention.org.za
