Tuesday, 6 May 2014

Green Buildings ‘More in Demand from Tenants’

The below is adapted from an article in The Prague Post on 17th April. You can access the full article by clicking here
 
Real estate investors and tenants are favoring projects that incorporate green technology, making the construction of environmentally friendly buildings increasingly cost effective, according to a Czech-based property specialist.
 
Jürg Zwahlen, a senior director at the property consultants CBRE in the Czech Republic, said at a recent Swiss Management Forum event that low energy consumption was a major attraction to both buyers of commercial property and companies interested in taking space.
“Green building is increasingly relevant for society. … Green buildings make sense economically,” he said.

In the Czech Republic, a total of 28 percent of energy consumption is accounted for by buildings, so any efforts to make buildings greener could have a significant impact on total energy use in the nation, Zwahlen suggested.

Just simple measures to reduce energy use in existing buildings can easily cut consumption by “10 to 15 percent.”

When green technology is included from the initial design stage, according to Zwahlen energy savings from 20 percent to as much as 60 percent can be achieved.

“The technologies we need to build sustainably now exist... the technologies are already in place and they’re still improving,” he said.

“It’s technically possible to build a zero energy building. It was technically possible 20 years ago. Today it’s also possible to build positive energy buildings – buildings that create more energy than they use. It’s not always economical, but we do not have the technical problems to build green.”

He said companies were advised to “have a very careful look at this” and to focus investments on properties with reduced energy use and with other green features.

Developers should, he suggested, consider the longer term benefits of using green technology in buildings. Tenants can save significant sums on energy bills, making green commercial property easier to let, resulting in, he said, “dramatically lower vacancy rates.”

Tenants tend to be willing to pay only lower rents when buildings have higher energy costs, according to Zwahlen.

“I believe it’s a trend and it will go on. I’m convinced green standards pay back long term,” he said, adding that even initial costs could be managed by careful design to, for example, make maximum use of sunlight.

“Design and construction costs do not necessarily have to be higher when you build green. … A lot of these solutions don’t cost more.”

The total number of buildings in the Czech Republic receiving some form of sustainability certification is said to have increased significantly. The two main green building certification programs, the Leadership in Energy and Environmental Design (LEED) from the United States and Building Research Establishment Environmental Assessment Methodology (BREEAM), developed in the United Kingdom, are roughly equally popular in the Czech Republic, according to Zwahlen.

“What’s clear is that it’s a trend. In the ’90s, there was a time when it was one building per year [being certified]. It’s gone up dramatically,” he said.

“The developer that builds a building today, a certified building, for sure gets a higher price when he sells it.”

CBRE manages about 1.2 million square meters of office space in Prague, which works out at around 15 percent of the total space in the capital.

Jürg Zwahlen
Senior Director, CBRE Property and Asset Management

 

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