Green credentials rise on building agenda, says report

THE property industry is “some way” from being able to provide definitive cost comparisons for energy efficient buildings because of a lack of agreed definitions for measurement and the availability of data, according to a new report.

The research undertaken by CB Richard Ellis shows that achieving the more basic levels of sustainability certification may raise development costs by 2% to 3% above those for a standard building.

The report investigates the true costs of buildings going green.

CBRE said the development of a building to achieve higher standards of sustainability accreditation is likely to add between 5% and 7.5% to construction costs.

However, this can be recouped in higher rents and higher rental growth.

Richard Bamford, CBRE’s head of building consultancy in Leeds, said: “As the market tightens we are seeing an increased emphasis from both tenants and investors for environmentally friendly buildings which we believe signals a gathering momentum behind this initiative.  

“We have recently been involved with a number of refurbishment projects in Leeds and the North East where developers and investors have sought part way through a scheme to further improve the green credentials of their product in order to have the strongest chance of securing the best tenants. 

“The question of whether developers or investors can afford not to strive for the best green credentials is perhaps more pertinent, particularly when there are a number of relatively low cost ‘easy wins’ that can put you ahead of the competition.” 

With the Department of Energy, and Climate Change set to launch draft legislation for the Carbon Reduction Commitment (CRC) this month, energy consumption, energy efficiency and how payment is dealt with are firmly back on the agenda for landlords and tenants, CBRE said. 

The scheme started on April 1, and is mandatory for businesses that spend around £1m a year on electricity – approximately 5,000 participants.