Part 2 - Green Buildings Benefit all

David Baggs, CEO and Technical Director

Part 1 of this series explained how integrated design processes undertaken by experienced green development design teams are able to increase sustainability outcomes at no or low cost differential compared to conventional delivery processes. In this issue, the second part of this article will present information from 4 different continents about recent discoveries in the benefits of green buildings to developers, owners, occupants, societies and living systems.

Given the recent turbulent economic times and consequent downturn in construction activity throughout most of the world during the global financial crisis (GfC), it might be expected that sustainable construction or green building would experience the same downturn. Yet, experience during these times has shown that despite this, the green building sector has continued to outstrip conventional building sector in general. For example, in Australia during 2008, the green rated commercial building market grew over 550%; in Singapore it grew over 580%; the UK has set aggressive low carbon and building sustainability requirements and the US green building market represents a multi-billion dollar industry.

It is also my view, based on many recent interviews with UAE developers, that apart from a number of key leading companies, large segments of the UAE development sector have been too slow to respond to this market change that has been evident internationally for some years now. While the whole greenhouse impact issue is an overarching driver, it is not the only one. When 80 of the worlds largest banks became signatories to the 'Equator Principles' over the last couple of years, they committed to only lending to projects (over US$10m) that met the inherent sustainability principles, including within the detail, green rated buildings. The impacts of these issues together on the global construction industry should have been obvious to those who considered the issue.

Let us now look at current experiences and reports in a variety of different continents.

Middle East

Before the GfC, Dubai based property developer Nakheel announced results of market research of a cross section of over 400 residents from Abu Dhabi, Dubai and Sharjah, which showed that half of buyers would choose a property based on its environmental friendliness. Matt Joyce, Managing Director of Waterfront Nakheel at the time in 2009 was quoted on as saying:

"In the past, quality has been one of the most important factors for potential customers. This is the first time we've seen environmental concerns come through this strongly".

While the importance of sustainability is now evident in local commercial research, with the slowdown in market activity, projects already designed and committed may find that by the time they get built, they will be looking for sales in a very different market - one exhibiting a real, educated demand for sustainable real estate product.

This view is also supported by Gurjit Singh, the chief property development officer at major developer Sorouh Real Estate in Abu Dhabi in a 2009  interview in The National Newspaper,  "With the real estate industry being one of the largest contributors to carbon emissions, if sustainability is neglected because of the financial movements that are happening now, then we would be seriously jeopardizing future financial returns in the industry," Mr Singh added that in his view during downturns, issues such as sustainability become more important, particularly as home buyers have the ability to be more discerning in a weaker market. "They are looking for greater ­quality," he said.

The rise of Green Development in Abu Dhabi

With the launch of the Emirate of Abu Dhabi Urban Planning Council's Estidama Pearl rating scheme, (ecospecifier was the lead consultant on the draft New Buildings Rating Method) Abu Dhabi took the first of a number of giant leaps into a more sustainable future. From September 2010 a One Pearl rating is mandatory and is written into the new Abu Dhabi Building Code, (based on the International Building Code). One Pearl is a significant requirement, having been based on leading edge specifications from Europe and US upgraded for the extreme climate and local practices, One Pearl requires:

  • Natural Systems Design & Management Strategy
  • Minimum Interior Water Use Reduction
  • Exterior Water Monitoring
  • Minimum Energy Performance
  • Energy Monitoring & Reporting
  • Ozone Impacts of Refrigerants & Fire Suppression Systems
  • Hazardous Materials Elimination
  • Basic Construction Waste Management; and
  • Basic Operational Waste Management.

And hence goes well beyond most minimum Building Code requirements current in most developed nations.

In a unique planning and building regulation synergy, Abu Dhabi has in a few short years managed not only to fully integrate sustainability into its all its new core planning and building regulations, but integrate them with a leading edge green building rating tool and project specific building guidelines such as the Sustainability Policy and Framework Plan for the 4,500 hectare Capital District project.


Furthermore, for Government financed buildings, Two Pearls (approximately equivalent to LEED Gold or Green Star 5 Star) is mandatory. Given that a substantial proportion of new developments including the Saadiyat Island Development & Cultural Precinct, (Due for completion by 2018, Saadiyat is expected to be home to an estimated 150,000 residents with a full complement of leisure and tourism facilities, as well as civic and cultural amenities. It will be developed around six districts with 29 hotels, 3 marinas, a culture and arts hub, 2 golf courses, 19 kilometers of beachfront. The island will be linked to Abu Dhabi city via two causeways, one of which will operate a light rail system and a 10-kilometre long highway with bridge) the new Abu Dhabi Capital District (the reconstruction and extension to over 4500 hectares of the city of Abu Dhabi) and its Emirati Villa construction program (over USD 750 billion), are Government funded, this is likely to a major new market for green materials and technologies.

In a unique planning and building regulation synergy, Abu Dhabi has in a few short years managed not only to fully integrate sustainability into its all its new core planning and building regulations, but integrate them with a leading edge green building rating tool and project specific building guidelines such as the Sustainability Policy and Framework Plan for the Capital District project.

Green Building Councils have also been established and are very active in Oman, Qatar, Saudi Arabia, UAE and Bahrain.

United States Green Buildings

According to based on a the new McGraw-Hill Construction's "Green Outlook 2011: Green Trends Driving Growth" report, the value of green building construction starts was up 50% from 2008 to 2010--from $42 billion to $55 billion-$71 billion--and represents 25% of all new construction activity in 2010, with the green building market size expected to reach $135 billion by 2015.

Green building is the bright spot in an otherwise tough economy, and in some sectors, that rate of growth has been remarkable. In nonresidential building, for example, the green building market share is even higher than the overall market. Today, a third of all new nonresidential construction is green--a $54 billion market opportunity.

In five years, nonresidential green building activity is expected to triple, representing $120 billion to $145 billion in new construction (40%-48% of the nonresidential market) and $14 billion to $18 billion in major retrofit and renovation projects.

To break it down further, health care construction this year is expected to grow its green share to as much as 40% (valued at $8 billion-$9 billion in 2010)--phenomenal growth in just two years. Education (valued at $13 billion-$16 billion in 2010) and office green construction (valued at $7 billion-$8 billion in 2010) also remain strong sectors, showing high increases in market share, due in part to the fact that bigger projects are the most likely to "go green."

This year, the U.S. Green Building Council's LEED specification is mentioned in 71% of all projects valued at over $50 million. (source:

box2.pngA global study in 2008 by sustainability expert Greg Kats, has found that premiums for new green buildings average just 2 percent. In his "Greening Buildings and Communities: Costs and Benefits" report, he finds that most green buildings cost less than 4 percent more than conventional buildings, with the greatest concentration of premiums in the 0 percent to 1 percent range. Remembering this is capital cost, not life-cycle costs, this a strong indicator that integrated design processes (see previous article) are being used extensively and effectively in the USA.

A CoStar study revealed earlier in the year, key indicators of building value such as occupancy, sale prices and lease rates tend to be higher in green buildings than in conventional buildings. This was confirmed by another 2008 report confirming the financial benefits of green building to developers by the US Green Building Council.


Energy savings

Rent premium,
per sq. ft.

Increase in
occupancy rates

Sales premium, per sq. ft.

LEED certified





LEED Gold & Platinum

Approx 50%

Table 1: Financial Benefits of Green Buildings (USGBC)

In these figures we see obvious, up front benefits directly to developers and substantial downstream benefits to owners.

Furthermore, 80% of respondents in a 2009 survey by the Building Owners and Management Association (BOMA) International, the U.S. Green Building Council (USGBC) and the publication Real Estate Forum said that energy efficiency measures have defrayed costs, and 65 percent said their green investments have generated a positive ROI, which is up about five percent from 2008.  Whatsmore, nearly 70 percent of corporate real estate executives responded in a recent survey by Jones Lang LaSalle and corporate real estate trade group CoreNet Global, that sustainability is a "critical business issue", up almost 20 percent from last year.


Singapore's relatively  new Green Mark building certification scheme has been in place for approximately 3 years now and is showing significant impacts within the local market with nearly 350 buildings certified or in the pipeline with a total over 21 million m2 of 'green' floorspace.


Table2: Range of Cost Premiums and Payback periods vs level of GreenMark certification in Singapore. Source:  The Business Case for Green Buildings in Singapore -

Singapore design professionals are also exporting the expertise they have developed using GreenMark to countries like UAE, China and Southern Asia.


According to the most recent report by the Green Building Council of Australia, the Dollars and Sense of Green Buildings 2008, green buildings can deliver productivity gains of more than 10 per cent and result in less sick leave and improved morale.

Environmentally sustainable workplaces are emerging as key issues in hiring and retaining staff. An Australian Newspoll survey conducted late last year found that 84 per cent of employees want to work in an environmentally friendly office, and those who do work in them, according to the Green Building Council of Australia, sing their employer's praises.

An article on presenting the findings of a comparative post-occupancy evaluation based on occupant surveys of 22 'green design intent' buildings and 23 conventional buildings in Australia in 2008 found that the best green buildings consistently outperformed the best conventional buildings from the occupants' perspective.  Across the buildings studied, the researchers identified significant associations between perceived productivity and overall comfort (lighting, ventilation, thermal comfort, and noise) and between perceived productivity and thermal comfort in particular.

In the offices of Sustainability Victoria an Australian State Government Department a sustainable refurbishment has yielded high quality data about very high levels of increased productivity with surprising level of detail.

Meeting Room Productivity

Overall Performance

Concentration up by 34%

Productivity up 45%

> Participation up by 41%

> Workplace performance up 13%

> Perception air quality up by 15%

> Informal interaction supported

> Perception ambience up by 19%

> Reflects SV sustainability values: 96%

> Sick leave down by ~ 30%

> More comfortable office: 69% (light, air quality/temp, ergonomics)

Table 3: Productivity Benefits of Sustainable Office Interior refit of Sustainability Victoria, Australia

Source: Sustainability Victoria

The building design issues that are most relevant to delivering this type of performance are the quality of:

  • plants.pngindoor air including operable natural ventilation when appropriate and worker control of air streams;
  • natural and artificial light;
  • thermal comfort and control;
  • Privacy and interaction;
  • Emissions and qualities of materials;
  • Presence of indoor plants and views of nature;
  • Layout of Floorplan, quality of design and flexibility of meeting and breakout rooms;

Figure 1: Plantscaping in Green Building Council of Australia's new offices

  • Presence of water efficient fittings, good quality water;
  • Proximity to public transport and facilitation of cycling access;
  • Workspace flexibility;
  • Integration and accessibility of technologies and usability of interfaces;
  • Cultural Sensitivity.

gbca office.png

Figure 2: Efficient waste recycling facilities in Sustainability Victoria's (Australia) new offices

In another study of 500 Collins Street Melbourne, an office building was refurbished with existing tenants polled before and after the 6 Green Star renovation (equivalent to LEED Platinum). Two separate companies were polled and the results found:

  • average sick days per employee per month reduced by 39%;
  • sick leave costs reduced by 44%;
  • speed and accuracy of typing increased
  • lawyers' billing ratios increased, even as average hours declined (ie they worked more efficiently).

In 2004, I was involved in a project where a 2000 apartment development in a new urban village within the city of Sydney called Green Square was developed with high performance sustainability outcomes.

There were 11 stages of this development and at one time 5 were on the market at the same time. Of these 5 the developer decided to market 3 of them with the names "Eco 1", Eco2" and "Eco 3"although they were for all intents and purposes exactly the same as the rest of the development. These 3 buildings sold out before the rest of the remaining projects began to sell, demonstrating the time and consequent financial benefits of green differentiation.

collins st office.png

Figure 3: 500 Collins Street Melbourne (Australia) refurbished offices

The overall potential benefits of green buildings to the various stakeholders in the development chain can be summarised as follows:


  • Low to no additional cost if a competent, efficient integrated design process is used from inception;
  • faster sales;
  • better sales in a tight market;
  • better returns
  • future-proofed sales in long delivery time projects
  • easier funding
  • more cost competitive funding
  • Marketing and PR benefits


  • future-proofed asset value
  • higher staff productivity
  • lower operational costs
  • better tenants
  • longer leases
  • better returns
  • Less fitout churn as fitout lasts longer with added flexibility
  • Marketing and PR benefits
  • Better quality information on which to base operational decisions


  • Better daylight
  • Higher quality indoor air and ventilation
  • Better control over (sometimes individual) thermal comfort
  • Better concentration
  • Better health
  • Connection to outside world and nature
  • Flexibility of workspace
  • Increased happiness

Society/Natural Systems

  • Increased natural systems health
  • Increased biodiversity
  • Reduced Healthcare costs
  • More vibrant health economy
  • Increased happiness

Green buildings have a lot to offer all sectors. The way to achieve high level sustainability outcomes with no or low additional costs is to use integrative design processes. Together, the outcomes are definitely win/win/win/win all round.