South Africa is at the forefront of green building technology, and Tshwane is leading the pack. Not only has its new headquarters received a 5-Star Green Star SA certification, but Tshwane is one of only four international cities to participate in a new partnership between the World Green Building Council (WorldGBC) and the World Resources Institute-led Building Efficiency Accelerator (BEA), in a bid to double the rate of energy efficiency in buildings by 2030.
Little wonder, then, that Tshwane is also hosting the annual Green Building Conference on 14 June, under the auspices of Sustainability Week 2017. It’s an event that nobody in the building industry can afford to miss: South Africa’s green building economy is rated in the McGraw-Hill Construction World Green Building Trends survey as the fastest growing in the world, and the Green Building Conference is where the top minds of this exciting sector assemble to exchange insights and best practices.
Why green building?
Dorah Modise, CEO of the Green Building Council and a keynote speaker at the event, comments, “The environmental benefits of green building are beyond dispute. With the construction and on-going operation of building consuming 40% of total energy usage worldwide and generating one third of all carbon emissions, green building is a major part of the solution to addressing climate change and resource scarcity.
“South Africa has the highest green building share in the world, trumping countries such as the UK and the US, China, Singapore, Germany, and the historical green building market leader Australia. One can attribute this to a number of factors, but most notable are the glaring resource constraints and escalating utility prices. Electricity shortages and most recently the drought that’s been with us the past two to three years have increased the level of awareness across the board and the property sector is one such sector that is beginning to show leadership in sustainability thinking.
According to the Green Building Council’s Green Building In South Africa report, the average cost premium of building green over and above the cost of conventional construction was just 5.0% at the end of 2014. Modise purports that costs will inevitably come down. Green building is also an employment driver.
“Unemployment remains one of the biggest challenges in South Africa. The fast-paced growth of Green Building and evolving innovative approached means that there is a continued increase in new industries, translating into the creating of new jobs. Existing building certifications are growing at an exponential rate due to elevated demand in the market,” says Modise.
A smart business move
Beyond the environmental and social benefits, green building simply makes good business sense.
“In the local property industry,” says Modise, “the question that is now being asked is: ‘What is the price of not building a green building?’ With higher running and operational costs as resources become depleted and space a premium, asset managers, property developers and owners need to seriously consider the long term benefits of building resource-efficient buildings – not to mention the greater paybacks and payoffs of developing a ‘green’ building.
“A certified green building creates a differentiated product in the market, which is viewed as technologically advanced and environmentally and socially responsible, where these claims have been independently verified. These attributes can be positively linked to the company brand and image of the owner and/or the tenant.”
Modise explains that green precinct developments are also taking place, for example Menlyn Maine in Pretoria, Waterfall Estate in Midrand as well as V&A Waterfront and Century City in Cape Town
Private and public sector leadership
Not only is green building a runaway train of economic growth, it is also an area where the public sector is catching up with the private sector in terms of leadership.
“While the private (commercial sector) is in the lead on green star certified buildings, in recent years we have seen an exponential growth in public sector take up,” comments Modise. “We have certified 13 buildings owned by national, provincial and local government and state-owned enterprises. What is more encouraging is that the growth in green buildings within the public sector is across the board (i.e. from environment, to economic and social based Departments).
“Local Government remains the largest sector of government where there is maximum potential for green building and we have been encouraged by the commitment of the South African Local Government Association (SALGA) to action in this space as well as the City of Tshwane, which is part of our Green Building Leader Network.”
In short, the Green Building Council South Africa has plenty of reasons to celebrate. Commercial properties are being certified at a rapid rate. “This means one thing: that green building is growing exponentially in South Africa,” concludes Modise.
Interested in being part of the action? Be sure to catch up on all the latest green building trends at the Green Building Conference.
To register for the Green Building Conference, click here.
To find out which top minds in green building are speaking, click here.
The advantages of green building, as described by Dorah Modise:
Energy and Water: Green Star SA rated buildings cite energy savings of between 25% and 50% compared to a building designed to regular SANS 204 standards. The payback periods of energy and water saving initiatives are becoming markedly shorter as a result of increasing utility costs and the wider availability of more affordable green building technology. Waste will soon become a great opportunity for cost savings in green buildings with an imminent increase in waste removal as landfill sites start to run out of airspace.
Higher returns on assets: Extensive studies in the US and Australia have shown rental rates in green buildings to be approximately 6% and 5% higher, respectively.
Increased property values: Green buildings result in increased property values as a result of decreased operating costs, higher lease premiums and more competitive, less risky, future-proofed buildings. This has been empirically proven in the US and Australia with 11% and 12% valuation premiums, respectively, and is mainly due to increased desirability, tenants want to be in green buildings, especially corporates with sustainability targets to meet. We are beginning to see this trend in the South African property market.
Reduced liability and risk: Green buildings are future-proofed against increases in utility costs, potential energy and water supply problems, tightening legislation, carbon taxes, and the impact of mandatory energy efficiency disclosure, as well as costly retrofits to ensure they are not at a competitive disadvantage in future, or even obsolescence.
Ability to attract and retain government and other major tenants: The South African Department of Public Works’ planned ‘Green Building Framework’ Policy is likely to include certain green building requirements for government accommodation. This will increasingly apply to large multi-national tenants too. In a number of countries, government and leading companies have committed to only build or occupy green certified premises in order to show commitment and leadership. Green leasing is also becoming a key focus for many corporates and governments who require specific green building elements as part of the lease.
Responsible investing: Investment in green building forms an integral part of the worldwide trend to more responsible, sustainable and ethical investing. The Triple Bottom Line concept developed by John Elkington looks at the economic, social and environmental impact of an organisation. The Triple Bottom Line and its core value of sustainability have become compelling in the business world due to accumulating anecdotal evidence of greater long-term profitability.
Increased productivity: Improved internal environment quality (IEQ) from increased ventilation, temperature and lighting control, as well as day-lighting and the absence of toxic materials, results in improved health, comfort and wellbeing of building occupants. This has been shown to lead to increased productivity – an important area of focus due to its significant potential impact on the profitability of a business. Studies show resulting improvements in productivity of up to 20% – easily covering the premium, which may be paid for by the higher quality green space.
Competitive edge in attracting and retaining talent: Employees and younger graduates who are increasingly aware of environmental and health issues, are making this part of their decision making process in applying for work or staying with the same socially and environmentally responsible companies.
Minimising the costs and impacts of churn: Employees and tenants often remain with a company as a result of increased comfort and occupant satisfaction, and more flexible spaces. With lease terms in South Africa typically ranging between three and five years, churn (tenant changeover) can lead to significant costs.