CBRE has released a new research report which tracks recent green office building trends in the Asia Pacific region and describes the market drivers which could interest investors seeking to strengthen their commitment to ‘greening’ their portfolios.
The report, titled Green Buildings: Everything Investors Need to Know, states that there are several drivers of growth of green office buildings in the Asia Pacific region. They include:
Government regulations and incentives
In Australia, all commercial offices larger than 1,000 square metres must perform energy efficiency evaluations and disclose their National Australian Built Environment Rating System (NABERS). Further to this, all Australian government offices with a net lettable area larger than 2,000 square metres must achieve a minimum 4.5 out of 6 NABERS stars. Some states have also introduced their own measures, such as New South Wales’ provision of incentives for commercial property landlords to upgrade to energy-saving lighting systems. These regulations and incentives are key drivers in the adoption/creation of green buildings throughout the region.
CBRE’s research found that numerous landlords in the Asia Pacific region have implemented several environmental and sustainability measures that have successfully reduced facility management cost – with some larger buildings reporting savings in excess of US$1 million (roughly $AU1.381 million) per year.
The report used 321 Exhibition Street in Melbourne as an example of green measures and corresponding money saved.
321 Exhibition Street is a 30,193 square metre building which uses several green measures to reduce energy costs, namely a modern air-conditioning system, low-energy LED lighting and an intelligent building management control system which is designed to monitor energy use. Each year it is calculated that the building saves $AU63,565 as a result of these measures.
However, the report stated that while investing in different green measures can save facilities management operating costs, the payback period must also be considered. For example, projects relating to water treatment/recycling involve a much higher payback period of over 10 years as they require up-front investments and physical alterations to properties.
Corporate social responsibility
Another driver of green building adoption was corporate social responsibility, as companies are now demonstrating a greater commitment to improving the wellbeing of employees, the communities they operate in and the broader environment.
The report found that this has resulted in more companies developing or occupying green buildings and publicly reporting on their environmental performance.
Another study by CBRE found that 72 per cent of corporations surveyed in the Asia Pacific region operate employee wellness programs in their workplace. These programs include green features that utilise natural lighting, sufficient ventilation and functions to adjust the indoor environment – all of which can safeguard employee’s health and ultimately improve productivity and satisfaction.
The report also provided several recommendations for investors seeking to ‘dip’ into green building. These recommendations include:
- Benchmarking sustainability performance.
- Exploring the development of Net Zero Buildings.
- Capitalising on green building incentives and financial support.
More information on CBRE’s Green Buildings: Everything Investors Need to Know report can be found here.