Building green costs on average only 5% more than conventional building: study
Green Star SA certification was found to result in an average green
design penetration of 42.7% of the total project budget. Green design
penetration indicates the extent to which the Green Star SA Office v1
Rating Tool has introduced green design into elements of a project,
expressed as a percentage of the total project cost.
The study analysed the green design premium and green cost penetration in terms of location; construction area; base building cost; tenant mix; vertical façade to construction area ratio; Green Star SA rating levels (4, 5 or 6 Star); rating type (Design or As Built) and certification date; and rating tool categories, of which there are nine, totalling 69 credits.
As would be expected, the green cost premium increases as the Green Star SA rating increases, with an average premium for a 4 Star Green Star SA rated building being 4,5%, 6.6% for a 5 Star Green Star SA rating and 10.9% for a 6 Star Green Star SA rated building.
|Interestingly, there was a
slight difference in average costs in the three major economic hubs,
and a correlation between the cost premium and penetration. Penetration
was found to be slightly higher in the Western Cape (46%) versus
Gauteng (41.8%) and KZN (40.4%), while the average cost premium in the
Western Cape was 6.9%, 6.0% in Gauteng and 4.5% in KZN.
It was also found that construction area had a significant impact on green building costs, with costs dropping from 9.3% for a building under 5000m² to 2.6% for buildings over 50 000m².
Danie Hoffman, programme leader for Quantity Surveying at the University of Pretoria says that contracts for larger buildings often benefit from more competitive tenders due to higher levels of productivity. “Economies of scale also result in larger developments having higher efficiency levels (and lower building costs per square metre) of installations such as lifts, escalators or air conditioning systems. So a large office development of say 28,000m² with a substantial budget of R350 million will therefore often be able to afford green building initiatives more easily compared to a building with the same specification level but 1,000m² in size and costing R14 million. Larger projects will also offer design teams more green design options/scope which all support lower green cost premiums.”
There were some interesting findings in the analysis of tenant mix. Firstly, from 2009-2011 only 20% of green buildings were developed for generic clients, or multi-tenanted buildings. This escalated to 40% during 2012-2014. In addition, it was found that a building developed for a single tenant showed a significantly higher premium (8.1%) than a multi-tenanted building at 3.4%.
Hoffman says that this is because single corporate tenants often set more demanding specification levels and may also strive for a higher Green Star SA rating as part of corporate marketing and public image. “Such tenants will in most cases also provide design teams with more substantial budgets that can allow for more expensive, state-of-the-art green design solutions,” he adds.
Other noteworthy findings of the study include:
The findings in this report are very encouraging and, together with the findings from the joint MSCI/GBCSA Sustainability Index that shows that in South Africa green buildings yield a higher return on investment, they make a very strong business case for green buildings to developers, property owners and corporates,” concludes Braune.
*For more information and to view the report, please visit www.gbcsa.org.za/knowledge/reports/
Building Council South Africa (GBCSA)
Gillian Gernetzky, Communications Manager, GBCSA
Tel: +27 86 104 2272
Association of SA Quantity Surveyors (ASAQS)
Tel: +27 11 315 4140/1/2