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 zawya.com 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.
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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 SustainableBusiness.com 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: http://www.solarfeeds.com/sustainable-businesscom)
A 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.
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Energy savings
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Rent premium,
per sq. ft.
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Increase in
occupancy rates
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Sales premium, per sq. ft.
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LEED certified
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25-30%*
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US$11.24
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3.8%
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US$171
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LEED Gold & Platinum
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Approx 50%
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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
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 -
www.bca.gov.sg
Singapore design professionals are also exporting the expertise
they have developed using GreenMark to countries like UAE, China
and Southern Asia.
Australia
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 yourbuilding.gov.au 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
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Overall Performance
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Concentration up by 34%
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Productivity up 45%
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> Participation up by 41%
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> Workplace performance up 13%
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> Perception air quality up by 15%
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> Informal interaction supported
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> Perception ambience up by 19%
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> Reflects SV sustainability values: 96%
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> Sick leave down by ~ 30%
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> More comfortable office: 69% (light, air quality/temp,
ergonomics)
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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:
indoor 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.

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.

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:
Developer:
- 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
Owner:
- 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
Occupier
- 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.