South Africa Going Green
Astute property developers, investors and entrepreneurs will no doubt already be aware of the next big era in the property, namely the profound impact that ‘green building’ practices are going to have on the industry in the foreseeable future. There are boundless business opportunities emerging as South Africa’s commercial property developers and investors join the bandwagon of what is fast-becoming a global phenomenon.
Building design is undergoing a transformation, moving away from work environments that are closed off from the outside world towards places of business designed to be at one with the natural surroundings. For instance, the power-draining air conditioners so often found in high-rise buildings and the shimmering glass towers that trap heat are set to become a thing of the past, as landlords and tenants demand real estate more reliant on renewable energy and reusable materials.
The recent IPD/Sapoa Property Investment Conference held in Cape Town recently focused primarily on the global trend towards constructing and refurbishing buildings along environmentally friendly lines. Delegates were informed that commercial property and the world’s airlines are two of the major contributors towards the production of dangerous carbon gas emissions destroying the earth’s ozone layer and as a result, contributing to the ever-looming global warming.
The South African real estate industry has only recently begun adopting green building standards, but the movement is expected to gain momentum. The Green Star Rating System is currently being introduced and although the ratings are not compulsory, pressure is anticipated to come from corporates, particularly those with international shareholders who want to be seen as socially and environmentally responsible.
According to the chairman of the Green Building Council of SA, Bruce Kerswill, “We in South Africa haven’t felt the sense of urgency on this yet. But we can expect to see stakeholder and government pressure here soon. South Africa has agreed to cut carbon emissions”. While some may not be inspired by the moral aspect, there is certainly a compelling business case for the greener option, with research showing that productivity can increase from about 5% to 15% with employees who work in a ‘green’ building.
Like all the healthier things in life, green buildings do tend to be on the expensive side when it comes to building and ultimately renting, however the cost is not quite as much as one might expect. For instance, in Australia a four-star building would cost the same as a non-green building in capital costs, while a five-star building requires more technology and would be around 5% extra in total cost. At 11% more for a six-star building, Kerswill believes this is “not a huge premium” to pay.
Buildings that promote the use of public transport rather than the use of private vehicles by being situated close to major transport nodes or because smaller cars get the best parking will earn more points than those that don’t. There is a huge emphasis on recycling and points are earned for sourcing local products rather than importing cheaper ones from elsewhere. There is another category that rewards “innovation” and this aims to “stimulate out of the box thinking” rather than simply adhering to the ratings.
Kerswill insists that this is not just a passing fad. Development director at Old Mutual Investment Group Property Investments, Brent Wilshire says that his organization has looked at their “top eight” buildings in a bid to identify areas to “make a difference”. He also produced some interesting figures indicating the extent to which these buildings ‘guzzle natural resources’. Just a 20% reduction in water use at these buildings alone would conserve enough water to fill 133 swimming pools every day.
“The important thing is you need to be able to measure then you can set targets,” Wiltshire says, highlighting the value of a green building rating system. “In our new assets, the green building principles are best practice. What is important is to get the right team in place. It’s about putting the philosophy in place upfront and making sure the team buys into it – it’s about an attitude”.
Managing director of IPD Occupiers and Management in the UK, Christopher Hedley indicates that corporate property will come under increased pressure and scrutiny for environmental performance and compliance. “Property investors face risks. Tenants will act and valuers will respond,” he says. He adds that as more green buildings come onto the market, they will start to get cheaper. “There is an increasing pressure to deliver. We have the need for accurate information. We’ve got to create monitoring and targets and need to be able to prove performance,” Hedley says.
The information in this article is courtesy of Jackie Cameron (“Making money in the new property era”, Realestateweb, 20 August 2008).
Property for sale in Noordhoek, False Bay.
Showing posts with label green building practices. Show all posts
Showing posts with label green building practices. Show all posts
Tuesday, August 26, 2008
Sunday, August 10, 2008
South Africa Going Green
An Engineering News article has drawn attention to the recent trend in South Africa where property investors are set to place more emphasis on green building. This comes after the United Nations identified property development as one of the primary contributors to global warming.
According to the UN, buildings consume between 40% and 50% of the world’s energy, 30% of raw materials and 20% of its water resources. However, it has also been identified as the one sector that has the potential to make the biggest impact on reducing energy consumption.
The adoption of green building practices, such as water recycling, solar heating, more energy-efficient air conditioning systems, could reduce energy consumption from 30% up to 70%. The property development sector’s unique position to effectively reduce the effects of climate change suggests that corporate property will now come under increased scrutiny for environmental performance.
IPD Occupiers UK director, Christopher Hedley addressed delegates at the sixth annual IPD/Sapoa Property Investment Conference held in Cape Town last week and explained that not many property investors were now tackling the issue of green building, as they placed more emphasis on investment returns than environmental sustainability.
In fact, statistics revealed that just half of property investment companies in South Africa were addressing the issue of climate change and green building. However, things are soon to change, as property investors will begin to receive pressure for greener buildings from tenants, governments and stakeholders, pushing them to integrate environmental sustainability into their future investment projects.
Old Mutual Property Investments business development executive, Brent Wilshire agreed with Hedley and argued that investors should think of climate change as a market transition, rather than an environmental issue. He added that it was essential for property investors to integrate green building practices into their investment portfolios because energy and utility costs are set to “explode”, infrastructure will be scarcer and the South African government may introduce green legislation in the future.
The green building initiative has been gathering momentum around the globe for the past five years. According to Bruce Kerswill, executive chairperson of the Green Building Council of South Africa, the real impetus for this initiative has been global warming. South Africa has not received the same pressure as other world nations to tackle the issue and is thus lagging behind the rest of the world in terms of implementing green building practices.
The recent electricity supply crisis in the country has given the green building movement in South Africa a push in the right direction, as this has forced property owners to seek out new ways of conserving energy in building techniques. Another factor playing an important role is that large multinational tenants have now started to demand environmentally friendly buildings and are willing to pay a premium to lease them, said Kerswill.
Also, Kerswill explained that the growing operational costs of transitional buildings have ensured that green building continues to gain in popularity. The operational costs of green buildings are significantly less, which is due to the lower electricity and water consumption, so the construction of such buildings is increasingly being seen as a better alternative in the long term.
The information in this article is courtesy of Jade Davenport (“Property investors urged to place more emphasis on green building”, Engineering News, 8 August 2008).
Visit www.noordhoekproperties.co.za or www.scarboroughproperty.co.za if you would like to buy or sell property in Cape Town's False Bay area.
According to the UN, buildings consume between 40% and 50% of the world’s energy, 30% of raw materials and 20% of its water resources. However, it has also been identified as the one sector that has the potential to make the biggest impact on reducing energy consumption.
The adoption of green building practices, such as water recycling, solar heating, more energy-efficient air conditioning systems, could reduce energy consumption from 30% up to 70%. The property development sector’s unique position to effectively reduce the effects of climate change suggests that corporate property will now come under increased scrutiny for environmental performance.
IPD Occupiers UK director, Christopher Hedley addressed delegates at the sixth annual IPD/Sapoa Property Investment Conference held in Cape Town last week and explained that not many property investors were now tackling the issue of green building, as they placed more emphasis on investment returns than environmental sustainability.
In fact, statistics revealed that just half of property investment companies in South Africa were addressing the issue of climate change and green building. However, things are soon to change, as property investors will begin to receive pressure for greener buildings from tenants, governments and stakeholders, pushing them to integrate environmental sustainability into their future investment projects.
Old Mutual Property Investments business development executive, Brent Wilshire agreed with Hedley and argued that investors should think of climate change as a market transition, rather than an environmental issue. He added that it was essential for property investors to integrate green building practices into their investment portfolios because energy and utility costs are set to “explode”, infrastructure will be scarcer and the South African government may introduce green legislation in the future.
The green building initiative has been gathering momentum around the globe for the past five years. According to Bruce Kerswill, executive chairperson of the Green Building Council of South Africa, the real impetus for this initiative has been global warming. South Africa has not received the same pressure as other world nations to tackle the issue and is thus lagging behind the rest of the world in terms of implementing green building practices.
The recent electricity supply crisis in the country has given the green building movement in South Africa a push in the right direction, as this has forced property owners to seek out new ways of conserving energy in building techniques. Another factor playing an important role is that large multinational tenants have now started to demand environmentally friendly buildings and are willing to pay a premium to lease them, said Kerswill.
Also, Kerswill explained that the growing operational costs of transitional buildings have ensured that green building continues to gain in popularity. The operational costs of green buildings are significantly less, which is due to the lower electricity and water consumption, so the construction of such buildings is increasingly being seen as a better alternative in the long term.
The information in this article is courtesy of Jade Davenport (“Property investors urged to place more emphasis on green building”, Engineering News, 8 August 2008).
Visit www.noordhoekproperties.co.za or www.scarboroughproperty.co.za if you would like to buy or sell property in Cape Town's False Bay area.
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