IF there’s one idea that has been redefining the way property builders worldwide look at being engaged in the real-estate sector as a sustainable and profitable venture, it’s got to be the idea of championing green construction as an integral pillar of their business.
Toward the end of 2015, I featured some of the recognized thought leaders in the country who shared key insights about what they feel would be the defining characteristics of the real-estate industry in this coming year. Almost all of them agreed that the idea of incorporating green technologies will continue to become prominent this year, as consumers identify themselves with the so-called healthy revolution and continue to look for developments that complement the state of wellness they aspire for.
“On average, environments with better ventilation doubled their participants’ performance, especially in critical areas such as crisis response, strategy and information usage,” wrote a feature from The Guardian that delved on the relationship between healthy buildings and achieving greater business returns. “As the connection between where you work and how well you work becomes better established and understood, companies that hope to differentiate themselves as employers of choice will focus on healthier buildings for their employees.”
Green building as an indicator of smart business
With the idea of green building slowly evolving to become the standard rather than just a mere differentiator for property developers, the local real-estate sector is truly facing a very promising future. As innovators and emerging-industry leaders make a monumental shift toward sustainability, the Philippine real-estate market can confidently emerge as a global leader for developmental initiatives that promote the welfare of its surrounding landscape and beyond.
“A few years ago, it [green building] was just about being socially responsible. Now it’s about being socially responsible and a smart business,” said Ross Shuster, president of international operations for United Technologies’ Climate, Controls & Security unit, during a recent interview with AsiaOne.
Shuster’s firm—United Technologies—recently funded a study that analyzed the progress of the green-building movement around the world. Conducted by Dodge Data & Analytics, the study revealed that “green-building space continues to double every three years, with strongest acceleration in emerging economies, and clients and tenants worldwide increasingly demanding sustainability.” This progress, the study noted, will be even more prominent among countries with emerging economies like the Philippines, as markets develop a greater understanding about how green buildings can help guarantee higher return on investment and nurture a more livable environment for present and future communities.
Higher value, more profit
A separate research done by Dr. Nils Kok of Maastricht University in the Netherlands and Dr. Avis Devine of the University of Guelph in Canada also revealed that “buildings with sustainable certification outperform similar non-green buildings in terms of rental rates, occupancy levels, tenant satisfaction scores and the probability of lease renewals.”
The subject of the study was the 10-year financial performance data from the 58-million-square-feet Bentall Kennedy-managed office developments both in Canada and the US. Some of the elements involved in the study included net effective rents, rent concessions, occupancy rates, tenant-renewal rates, tenant-satisfaction scores, and overall energy consumption within the predetermined spaces over the last 10 years.
“This is the most in-depth and conclusive analysis conducted to date of the link between responsible property-investment practice and financial returns,” noted Gary Whitelaw, CEO for the Bentall Kennedy Group. “By examining a large North American portfolio with consistent data across multiple market cycles, the results validate Bentall Kennedy’s focus on energy and sustainability improvement in buildings not only as a socially responsible strategy, but also as a way to enhance property income for our clients.”
Here in the Philippines, there are about 22 buildings in Makati City and Bonifacio Global City alone that either have standing applications for Leadership in Energy and Environmental Design certification, or have already acquired the said certifications, according to Lamudi. Now, as more and more players strengthen their commitment to build sustainably for the long term, it seems safe to say that 2016 may be filled with a lot of exciting happenings in the local real-estate market.