Value of green buildings significantly greater than their additional costs, finds Jae Mather
As sustainable construction and green building certification become more prevalent and the industry matures, there is increasing evidence of what many in the construction sector have felt for a long time: sustainable construction delivers significant added value.
Value should include financial benefits, such as decreased running and maintenance costs and increased rents, as well as other, less tangible elements. These include higher levels of occupier satisfaction and retention; less sickness absence among occupants; measurable improvements in productivity - often due to improved ventilation and internal air quality, and lighting that moves beyond simple LUX levels into virtual day lighting and varying light colour, for example.
A 10-year study of Canadian property management company Bentall Kennedy, published in The Journal of Portfolio Management, which examined financial performance data from across the firm's portfolio of 5.4 million m2 of assets, further demonstrates that green buildings deliver much greater value than the additional costs sometimes associated with their development and construction.
Some highlights of the study include:
- Energy consumption was 14% lower per m2 in US commercial properties certified to the LEED (Leadership in energy and environmental design) green building standard than in buildings without certification.
- Net effective rents were, on average, 3.7% higher in LEED-certified properties in the US than in similar non-certified buildings.
- Rent concessions for LEED and BOMA BEST (Canada's green building certification programme) buildings are on average 4% lower than in similar non-certified buildings.
- Occupancy rates over the 10-year period were 18.7% higher in Canadian buildings with both LEED and BOMA BEST certification, and 9.5% higher in US buildings with ENERGY STAR certification, than in buildings without certifications.
- Tenant renewal rates were 5.6% higher in commercial buildings in Canada with BOMA BEST level-3 certification than in buildings that did not meet the standard.
- Tenant satisfaction scores were 7% higher in Canadian buildings with BOMA BEST level 3 and 4 certification than in non-certified buildings.
Over the typical lifespan of a building these added values contribute to significant environmental and financial benefits. As time passes it becomes ever more obvious that sustainability equals business common sense.
