More than 600 delegates arrived at the start of the annual Green Building Convention on Thursday in Cape Town, prompting Green Building Council of SA (GBCSA) Chairman Seana Nkhahle to say that such a crowd is indicative that green building is gaining momentum in SA.
Environmental sustainability players would probably agree with Nkhahle, given that green building has gone from something that was viewed as fashionable to now being the standard for quality real estate.
In fact SA’s green building movement, which coincides with the launch of GBCSA eight years ago, has seen 140 environmentally-friendly certified buildings from only one building certified in 2009. GBCSA is targeting about 155 buildings for certification by year-end.
Green building has become a no-brainer, as SA’s energy crisis worsens with no indication of abating, with rolling power outages in recent months becoming a part of daily life.
But SA is increasingly playing in the big leagues with the country being recognised for its fast adoption of green building compared with developed and developing markets.
United States-based McGraw-Hill Construction, in its World Green Building Trends survey, notes that SA’s rapid adoption of green building trumps most developed regions which include Australia, Europe, the United States, the United Arab Emirates, Singapore and Brazil.
While SA is only playing catch-up to most counters, the survey expects the country’s take up of green building to grow three-fold: from a measured 16% in 2012 to 52% by 2015.
Despite the inroads in green building in SA, it seems as though there is still some pushback in embracing the movement. As Incite Sustainability founder and director Jonathon Hanks puts it: “The climate change denialism is still there. Climate change is uncomfortable news especially when people say that things won’t get better. It’s threatening their comfort zones.”
But in most cases green building is not a hard sell. In the property sector environmentally sustainable buildings – which have features such as efficient energy and water use, waste disposal, the use of recyclable materials in construction, sustainable use of space and of natural lighting – are increasingly demanded by tenants, says GBCSA CEO Brian Wilkinson. Investors often require demonstration of environmental commitments through a company’s environmental, social and governance plans.
Until recently, the jury was still out on whether energy-efficient buildings delivered better investment returns than buildings built to traditional standards. The latest figures by Investment Property Databank and GBCSA indicate that energy-efficient buildings have higher returns compared with conventional buildings. For the year to December 31 2014, energy efficient buildings netted total returns of 12.1% (income growth and capital return) compared with the 9% posted by conventional buildings.
The focus now should be on the existing buildings that in some cases are not environmentally sustainable. New buildings, which likely have green initiatives given that developers inherently build from the ground-up, represents up to 2% of total building stock while existing building sector is 98%, Wilkinson tells Moneyweb.
“The opportunity to do far more green building exists in the existing building area. If we are serious as a movement and mitigating against climate change, the focus needs to be on the existing building sector,” he says.
Some of the property counters that have been active in the green building space are JSE-listed heavyweights Growthpoint Properties and Redefine Properties.
Growthpoint, the largest company on the JSE’s more than R400 billion real estate sector with a market value of R69.7 billion, is earmarking 50 certified buildings by the end of 2016, from its current 23 wholly- and co-owned buildings that are certified.
Meanwhile, Redefine is aiming for at least a four-star Green Star rating, considered to be industry best practice, across all its new developments which include its 90 Rivonia Road and 90 Grayston Road properties in Sandton.
The writer was a guest of GBCSA at its annual convention in Cape Town.