If you want a higher-value building, buy in a vertical windmill and some photovoltaic cells. A study of buildings in North America and the UK by the Royal Institution of Chartered Surveyors says there is a link between the market value of commercial property and its environmental friendliness. RICS chief executive Louis Armstrong says: “Forty per cent of carbon emissions come from buildings. Finding incentives to make them ‘greener’ in design and operation is critical.”
The RICS study says that green buildings can earn higher rents and prices, attract tenants and buyers more quickly, cut tenant turnover and cost less to operate and maintain. It also says that, while tenants of green buildings can see the benefits of a more comfortable and productive working environment, the owners and developers of commercial real estate have been harder to persuade of the business advantages.
Meanwhile, property consultant SBH.uk warns that the Climate Change Levy and the forthcoming EU Directive on the Energy Performance of Buildings are both making energy efficiency a vital factor in warehouse construction and operation. In January 2006 the Government will be required to introduce the latest EU Directive, this time covering the energy performance of buildings. It will establish agreed measures of relative energy performance backed up by inspection, will require higher standards for larger buildings (those with an area of 1,000 sq m or more), and provide improved standards for new buildings. According to the European Energy Commissioner, the scheme could help cut consumption by a fifth by 2010.
“While the future of energy sources is uncertain, we can be sure that the price of energy will continue to be a major part of any distribution centre’s overheads,” says SBH.uk assistant project manager Will Cooper. “And any efforts to raise energy efficiency may well benefit from government support – a valuable aid in maintaining and improving business viability.”
Armstrong urges property industry groups, real estate valuers, appraisers, the financial sector and the green building lobby to work together to identify and promote the hidden benefits of green buildings, so that their market value can become a serious consideration for the hard-nosed landlord, developer and investor.