Demand for green buildings on the rise.
WITH leading multinational corporations at the forefront to lease green office space, the demand for green buildings in Malaysia will continue to rise as environmental awareness grows and more companies embrace the practice of corporate social responsibility.
Another driver is the growing body of evidence demonstrating that green buildings make financial sense.
CB Richard Ellis (Malaysia) vice-president research, Nabeel Hussain says there is growing recognition that key participants in the country’s real estate sector have a responsibility to adopt sustainable building practices and related technologies in order to play a pro-active role in climate change mitigation.
“Malaysia has introduced its own green rating system, the Green Building Index (GBI) in 2009. The Government is supporting the drive towards green buildings and technology and its Budget 2010 was the first one ever to give priority to the procurement of goods and services that are environmentally friendly,” he adds.
Nabeel reveals that studies by CB Eichard Ellis on mature markets such as the United States and Australia have found that developing green buildings can help landlords achieve higher values, fetch higher rents and enjoy higher occupancy rates than comparable non-green buildings.
In an ongoing study of national office portfolio in the United States managed by CB Richard Ellis, the company concludes that sustainable buildings are expected to generate stronger investment returns than traditionally-managed properties.
The study found that owners of sustainably-managed buildings anticipate 4% higher return on investment than owners of traditionally-managed buildings, as well as 5% increase in building value.
“Roughly 79% of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5% increase in building occupancy and 1% increase in rental income,” Nabeel says.
This is the second phase of a multi-year study initiated in 2009 by CB Richard Ellis and the University of San Diego’s Burnham-Moores Center for Real Estate.
The largest and longest-running study of its kind, the ongoing analysis benchmarks and measures green building benefits and economic results as a framework of investment criteria for retrofit activity.
According to the study, tenants in sustainably-managed buildings report increased productivity, satisfaction and health. Roughly 10% of tenant respondents have seen
increased productivity, 94% of tenant managers register higher employee satisfaction in green space and 83% of tenants believe their green space provides a healthier working environment.
The study defined a green building as those with Leadership in Energy and Environmental Design (LEED) certification at any level or those that bear the EPA Energy Star label. All Energy Star buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.
CB Richard Ellis was recently ranked 30 among Newsweek‘s greenest companies in America, and occupied top spot in the financial services sector. The US Environmental Protection Agency has named CB Richard Ellis an Energy Star Partner of the Year for the past three years, including recent recognition for “Sustained Excellence.”
Nabeel says the US Green Building Council has awarded CB Richard Ellis its Leadership Award for Organisational Excellence and the industry group, CoreNet, recognised CB Richard Ellis with a special commendation for Sustainable Leadership and Design Development.
In Asia, CB Richard Ellis recently won a Merit Award for Interior Projects in an Existing Building at Hong Kong Green Building Council’s 2010 Green Building Awards, in relation to its office relocation in Hong Kong.
CB Richard Ellis’ new office premises in Hong Kong, Shanghai and Mumbai have been designed and constructed in accordance with LEED best practices.