Why Green Buildings Are Worth Spending More?

Why Green Buildings Are Worth Spending More?
07/10/2019 , by , in EXPERT ZONE

By Dheeraj Dogra MRICS “Global Realty & Retail Analyst “

Most developers and building owners are deeply influenced by the financial impacts of design decisions, such as building green. At first glance, the additional work and alternative materials needed to build green may seem like a burdensome cost. As a matter of fact, most developers feel any improvement beyond a minimally code-compliant baseline is an added cost which would be difficult to justify.

Most construction companies and design professionals seem to think that green building will cost extra. Green building is often approached as an alternative that can be slapped on at the end of the design phase, if there’s money left in the budget. The research, however, shows that green building does not necessarily cost more than conventional construction, when it is integrated early in the design.


Integrate Green in the designing stage itself: If we consider energy improvements part of an overall process, we often find that the added costs are balanced by long-term savings. The initial expenditures continue to pay back over time, like a good investment. The best returns on these investments are realized when green building is integrated into the process at the earliest stages rather than as a last-minute effort. For instance, specification of more expensive, high-performance windows like the ones manufactured by Views Inc. may allow for the use of a smaller, lower-cost air-conditioning (HVAC), ventilation and heating system. Hence, the savings can start accruing from day one.


Lower Operating and maintenance costs:  It has been a finding in several studies that green buildings lead to a much lower operating and maintenance costs. Projects saw energy savings of 25-50% from code, depending on the area and the certification level achieved.


Productivity & Health of Employees: Green buildings usually have less chemicals, use more outside air, and provide better ventilation than code buildings. Less chemicals and more fresh air often result in increased productivity and healthier employees. When we look at the cost of a workplace operating over its lifespan, 85% of its costs are for salaries and benefits, 10% for rent, and 1% for energy. Therefore, increases in productivity can have a great effect on the profitability of a company. Worker efficiency increases by 23% from better lighting, 11% from better ventilation, and 3% from being provided with individual temperature controls. The findings above are based on work product outcomes, indicators of health (absenteeism), and indicators of well-being (stress level and mood). The report concluded that green building design attributes contribute to occupant health and well-being, resulting in healthier, happier, and more productive employees.

Another way to look at the benefit of green buildings is to compare them to buildings where occupants suffer from “sick building syndrome.” This is an unfortunate feature of many buildings constructed with traditional building materials, little ventilation, and no connection to the outside world. Occupants suffer from upper respiratory issues, fatigue, dizziness, nausea, and a host of other symptoms, all of which are alleviated by leaving the building. Simple green building techniques, such as using materials with less chemicals and providing more ventilation and access to views, would help those who suffer and improve productivity and attendance.

Green Building Attract Better Tenants & Better Rentals: Green Buildings have been found to command a higher rental, occupancy, and pricing levels than non-certified properties.  RICS (Royal Institute of Charted Surveyors) published a 48-page report analyzing systematic evidence on the economic value of certification of green buildings to the U.S. economy. Among the report’s findings the two most important revelations for the developer were :-

• Green buildings will rent for about 3% more per square foot; the difference in effective rent is estimated to be about 6%

• Selling price is as much as 16% higher with green buildings.

With REITs coming into play in the Indian Commercial Real Estate Developments, the green buildings would attract the best of tenants who are sensitive to employee wellbeing, better rentals, lower un occupancy levels, all leading to better capitalization. A Win Win for all !!




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