Page 21 - GreenRE_Sustainable Real Estate Book

WHY ARE GREEN BUILDINGS IMPORTANT TODAY?

Floor area will double to 2.4 tril ft 2 Economic Benefits of Sustainable Buildings

Green buildings are good for the people, good for the planet and good for profit. But in order to take
New green buildings to the next level, it’s important to clearly communicate how they help save cost,
Buildings improve value, attract new capital and improve the social and economic health of their communities.
globally by
2060 For many organisations, particularly listed entities, moving into a green building is a quick show

of regulatory compliance and commitment towards thes global cause to reduce carbon emissions.
This feeds into the trending demand for energy-efficient and sustainable buildings with healthy work
It’s like adding a New York City to the world, every month, for 40 years. environment. Occupiers not only seek carbon neutrality targets, but compliance of environmental,
Source: Global ABC, Global Status Report 2017
social and governance (ESG) elements and consideration of locations to reduce transportation costs
and lower carbon footprint.

Sustainable buildings are increasingly recognised for their financial benefits to owners, operators,
and occupants. By implementing green design and construction principles, buildings can achieve
Building Design an average of 20-40% less energy and water than traditional buildings, saving building owners an
Considers the People, Planet, average 15-20% on their utility bills.
Profit dimension. Concerns with
natural flow and symmetry. Energy Consumption There is a common misconception that green buildings, which prioritise resource efficiency and
Highly efficient active systems.
Lower or zero CO . occupant health, are more expensive to construct compared to standard buildings. However, the
2
cost difference is rapidly narrowing as escalation of demand create economies of scale breaking
Building Materials down price barriers for materials, equipment and technology. Surveys and studies have indicated that
Utilise greener alternative materials the additional costs associated with green building ranges from less than 2% to as high as 12.5%,
where possible. Eg low carbon concrete, with effective cost strategies and early integration of environmental considerations mitigating the
wood, stone, recycled steel and Energy Generation expenses.
low VOC materials. Less reliance on external energy sources.
Produce some of their resources onsite eg From an investment and financial perspective, green buildings have higher rental income than
solar PV, wind. traditional buildings, and enjoy a sales premium. Green buildings also have higher occupancy rates,
higher tenant retention, and lower vacancy rates. According to a study by the University of California-
Berkeley, sustainable buildings on average obtained a premium of 2-6% over conventional buildings.
The study further estimated that this rental advantage resulted in an increase of over US$5 million
in market value for each green building, based on prevailing capitalisation rates. A study conducted
by Carnegie Mellon University over a 15-year period from 1985 to 2000 demonstrated that enhanced
indoor air quality led to productivity gains ranging from 0.5% to 15%. Additionally, access to daylight
in office spaces was found to increase individual performance by 5% to 15%.

SUSTAINABLE REAL ESTATE | Our 10-Year Journey 10