GLOBAL - Sustainability continues to be a major priority for the real estate industry but more should be done to measure and evaluate green buildings and their costs, claims research by CB Richard Ellis (CBRE).
The report, entitled Who pays for green?, has called for an agreed definition for the measurement of the running costs, investment prices and rent levels of sustainable buildings versus conventional ones.
CBRE hopes one single agreed definition will then help to provide suitable benchmarks and encourage investors to invest in sustainability by better informing them.
"The desire to be green or to be perceived as such has often been led by a marketing agenda. Yet investors and developers will only adopt green practices if it makes good commercial sense," said Charlotte Eddington, CBRE's energy and sustainability director for Europe, Middle East and Africa.
"Especially in the current market, people rarely want to incur additional costs on a new development or a retrofit project unless they can visibly see a return that will materialise off the back of it," she continued.
CBRE's report suggested the development of a building to achieve higher standards of sustainability accreditation could add up to 7.5% to construction costs while achieving a more basic level of sustainability could raise development costs by 2-3% more than those of a standard building.
The research, which is based largely on US data and includes contractual lease rents, showed, however, that green buildings can attract higher rents averaging between 2-6% as well as higher rates of rental growth than on conventional buildings.
"To encourage an effective commercial rationale for green buildings, stakeholders have to recognise the benefits which should then result in a market shift in attitude," said Eddington.
She warned operational efficiencies must be improved and assets need to perform better as energy security is becoming a larger concern.
According to CBRE, sustainable buildings could save 10-50% of energy usage.
"In addition, government legislation at a national and European level is moving fast which means property owners will have to play catch-up if they delay plans to ‘green' their portfolio. It is important we don't sideline the green agenda in the downturn," she continued.
The UK's Department of Energy and Climate is due to launch draft legislation for the Carbon Reduction Commitment by April. The scheme is set to launch on 1 April 2010 and will be compulsory for businesses spending around £1m (€1.08m) a year on electricity.
The report advised investors to "act early to minimise costs of developing green," by sourcing the right materials and securing suitable design features.
The most common methods for assessing the sustainability of commercial buildings are the Building Research Establishment Environmental Assessment Method (BREEAM) and the Leadership in Energy and Environmental Design (LEED).
There are almost 100,000 buildings certified by BREEAM and 700 registered for assessment. LEED has 1,000 buildings rated and 9,000 registered for appraisal.
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