Location, location, sustainability
This month the Green Buildings Council of Australia launches the pilot Green Stars – Communities initiative, an independent, national scheme that aims to certify the sustainability of community level projects. Associate Professor Clive Warren at UQ Business School, an expert in green building rating in the commercial office space, asks: who needs a green star rating and how do we know what it’s worth?
When you rate a project at the design phase you’re rating a plan.
With commercial buildings responsible for emitting 8.8% of our national greenhouse gas emissions, the opportunity to make an environmental impact with more sustainable development is clear, and many are taking up the challenge. However, the property market is value driven, and for sustainable development to become mainstream, developers, owners and tenants need to have an easy and transparent way of measuring the commercial value of green rated developments alongside its environmental credentials.
“To achieve a significant investment in sustainability we need comparable evidence that demonstrates the financial benefits of sustainability in a commercial property. Stakeholders are hesitant to invest capital in initiatives that do not demonstrate a clearly positive effect on market value,” explains UQ Business School’s Associate Professor Clive Warren, who sits as an independent chair for the Green Buildings Council of Australia in undertaking building assessments and is a member of the RICS Asia Pacific Sustainability Steering Group.
Currently there are more than 100 different types of environmental rating tools worldwide. Although many are similar in intent, they are not yet producing comparably measurable data.
Associate Professor Warren advocates the development of a database of sustainable attributes of rated buildings to improve comparative analysis and allow valuers to identify whether sustainability is having a measurable effect on the various elements of market value.
He adds that there are other initiatives that will strengthen the current Green Star rating system.
In a study presented in 2009 to the Pacific Rim Real Estate Society, Associate Professor Warren showed that only 8 out of 95 green rated buildings in Australia at the time were rated ‘as built’. The rest were rated only ‘as designed’.
“When you rate a project at the design phase you’re rating a plan,” he explains, “not how well the plan is executed.” A green rated design, argues Associate Professor Warren, delivers marketing value to the developers, but unless there is a phase that rates the execution of the construction the green stars don’t say enough about the building’s actual environmental impact.
“The developer’s choice to pursue a design rating has obvious benefits, as it allows for buildings to be marketed as having achieved a Green Star rating before construction is commenced, thus attracting tenants seeking to occupy sustainable buildings,” he explains. This ability to rate a building by design is not available in other rating systems in Australia or internationally.
It is clear that the green rating system has a significant part to play in the marketing of green buildings. And in 2008 the value to developers of free publicity achieved as a result of the Green Star certification process was estimated to be in the region of $1.1 million.