Does ecology equal economy ?

green buildings
Does ecology
equal economy ?
The move towards
ecologically friendly
consumption, most evident
in the automotive sector,
has nevertheless found its
way into professional real
estate. But is this purely
for altruistic reasons, or
does there have to be a cost
benefit. And what exactly
constitutes a green building.
We spoke to several key
players within the industry
in Belgium.
© Patrick Blanc pour la façade végétale
n Tim Harrup
Renovation Belliard building Brussels
A
recent survey carried out by
property advisors DTZ, in collaboration with Solvay Business
School and Seco, gets right to the heart
of the problem simply through its title:
Does Green Pay?
Firstly, what has to go into a building to
make it ‘green’? The DTZ report clearly
demonstrates that insulation is the first
and most effective element. The extra
investment required to arrive at an insulation level of K45 is recouped in just
three years, compared to a traditional
building without special insulation
levels. But alongside these easily calculable savings come others. A building which has been well-designed,
including good levels of insulation,
ventilation and lighting, provides a
better working environment, and has
Seik Birkiye: “Architects and engineers have to take a lead”.
been shown in a study carried out in
the USA to lead to productivity gains
of up to 5%. If the total average cost of
an employee amounts to 75,000 Euros
per year, this therefore means savings
of up to 3,750 Euros. And alongside
this, employee turnover – another expensive factor for employers, has been
shown to decrease by some 10% in the
best buildings.
Built-in advantages
One of the pioneers at the conception
stage, architects Vizzion Europe, explained their approach. Founder Sefik
Birkiye and Sustainable Development
Director André Addieri: “We do not try
to merely follow norms, we anticipate
them. So it was that in 2008 we had our
calculations independently verified, to
ensure that they would already meet the
norms due for 2011. Yet our buildings
don’t look different, they do not allow
technological features to impose themselves on the architecture. What we do
is pragmatic and effective: reinforced
insulation, dual flow ventilation with
heat recovery, solar panels on the roofing, and carefully calculated volumes
with respect to surface area. Developers cannot be expected to define what is
other areas such as finishing levels. Instead, it is our job to prove to tenants
that by saving money on their fuel bills
they will more than compensate for
the higher rental they are being asked
to pay. And wherever we can, we limit
the extra construction costs through
simple, passive measures: orientation
of the façades where this is possible,
protection from sunlight, avoiding energy loss”. The proof that green buildings can attract higher rents comes in
the form of Brussels’ most well-known
example: Solaris. This has attracted
rents of some 10% above prime rent for
this zone (decentralised). This factor
also has to be seen in context, though,
as Cédric Mali points out: “This is the
only brand new green building so far
delivered in Brussels. So this is one
advantage, but there are other factors :
the timing is right, it is the only new
building of any sort in this zone, it has
wonderful views over the woods… so
being green is one of many reasons. But
just because a building is green does
not mean it will automatically attract
higher rents”.
necessary, the architects and engineers
have to take a lead”.
Certification
Building costs
The first financial element to take into
account is that of construction costs.
Cédric Mali, Managing partner of Catella Property: “Green buildings are more
costly to construct because of the more
precise nature of the technology which
has to go into them. There is more insulation, more engineering, technical features such as rainwater recuperation.
And above all, there is the use of materials which are recognised as being less
destructive of the environment from all
points of view – from their production,
through their transport, to their performance”. It is generally accepted that
green buildings can cost around 10%
more than traditional buildings at the
construction phase.
With the notion of ‘Green Buildings’
being relatively new, the certification
process is still in the development
stage. Currently, BREEAM (Building
Research Establishment Environmental Assessment Method), is
widely recognised, and certification
is considered as bestowing green
credentials on a building. Valideo is
a separate system, a reference guide
covering aspects from construction
right through to social value. As the
European Union’s Energy
Performance of Buildings Directive (EPBD) begins to become more
harmonised and have more teeth,
which is not the case at the moment,
it is certain that certification will also
become more standardised, and that
buildings will start to display the sort
of ‘green passports’ which accompany all new cars, for example.
Tenant reaction
Property developers and investors have
to make money. So does this assume
they simply pass on the extra cost to
their tenants – and why would tenants
pay this? André Addieri: “We do not
try to claw back any of the extra cost
by making inefficient cost savings in
Reference
« Does green pay ? » ‘(october 2008)
Research conducted by DTZ.
Download the report on
www.profacility.be/references
Developer payback
Without the certainty of higher rents,
how does the developer get his money back? One factor in their favour is
the increasingly important Corporate
Social Responsibility, or CSR. Emeric
Inghels of DTZ: “Demand for green
buildings is higher from multi-national
corporates because of CSR. Shareholders are demanding that companies take
a lead in the environmental field, and
companies are therefore willing to pay
a little more. We had one case of a very
large American law firm which was instructed by its head office in New York
to take ecological considerations into
account, and if necessary to pay more
for the building”. André Addieri adds:
“As well as making buildings environmentally sustainable, through the
measures we have already mentioned,
we make them durable through time.
By using better materials and designing
the building correctly from the outset,
maintenance costs are reduced, renovation costs at the end of a building’s first
life are reduced, and the residual value in the case of a subsequent sale, is
higher. We have to show this to buyers,
show them what they are buying and
why it is better. And even the banks
look more favourably on good quality,
durable and sustainable assets”.
Realism
Pierre Colette, partner at Cushman &
Wakefield, also put some figures forward when speaking at a recent conference in Brussels on the impact of the
‘Green Wave’ on real estate: “Green
Buildings are able to achieve rents of 3
to 4% above traditional buildings, and
sales prices of some 5 to 6% more. But
in the current economic situation, this
is not necessarily the case. Corporates
say they want to go green, but when
they discover it will cost them more,
they tend to go into reverse gear. Right
now, the only thing that counts is price.
Over the coming years, we will not be
able to push the price up simply because the building is ‘green’, but one
thing is sure, buildings which are not
green are going to suffer”.
More figures from the USA, however,
tend to prove the advantages of green
buildings in economic as well as ecological terms. Buildings in the US with
a high Energy Star rating are attracting
rental premiums of 3% according to a
survey by RICS. The researchers were
also able to look at the impact on the
selling prices of green buildings, and
here the premium is even higher, in
the order of 16 percent. This implies
that upgrading the average non-‘green’
building to a ‘green’ one would increase
its capital value by some $5.5 million.
Some examples
Solaris has already been mentioned. In
the domain of renovation, however,
‘t Serclaes in Brussels city centre has
been awarded Breeam certification.
And other buildings, such as Belliard
14 and Science 14 in the European district, have adopted a green look, quite
literally. In the case of Belliard 14, its
fully planted front façade will, in the
view of André Addieri, help to absorb
both heat from the outside, and CO2.
Science 14, just down the road, has a
fully planted interior atrium façade,
providing a more pleasant working environment. n
What the politicians say
Speaking at the conference on ‘Green
Buildings’, the political world made it
clear that this is not some temporary
fashion, but is here to stay. Emir Kir,
Brussels Secretary of State for Planning: “Brussels has a lot of heritage, but
we are ambitious and we want to build a
city for the 21st century too. From next
year, we are going to modify the planning
regulations in the city. And his colleague
Evelyne Huytebroeck, Minister for the
Environment and Energy, went further:
“We are making progress, considering
there were no passive buildings in
Brussels in 2006. Now, we have over
200,000 m² of exemplary buildings,
including 65,000 m² of low energy
consumption buildings. But during the
2009-2014 period, the rules will be much
more generalised. We will be legislating
in areas such as ecological materials,
renewable energies, water management.
We will also be moving towards a certification system which takes into account
total costs. And the same conditions will
apply to total renovations as to new constructions. All buildings of over 3,500 m²
will have to have an obligatory audit”.
Het laatste colloquium van ‘Editions & Séminaires’ had als thema
‘De impact van de groene golf op de vastgoedmarkt’. Teksten van de
conferenties verkrijgbaar op de website www.editionsetseminaires.be.
Pierre Thonon CEO BECI and Emir Kir
Brussels Secretary of State for Planning
Evelyne Huytebroeck, Minister for the
Environment and Energy en Laurence De
Hemptinne, Managing Director Editions
& Séminaires.