A survey of property investors posed the question, ‘How will green buildings perform against non-green buildings?’ An overwhelming 86% of respondents said that green buildings will become more valuable. Since then the pressures on real estate owners and managers to make their properties more sustainable have continued to grow.
However, there is more to sustainability in the built environment than ‘being green’ (We have come along way since doing good by doing green). It involves integrating a wide range of environmental, economic and social issues in a way that improves a building asset for its owners and users, and protects and enhances its value as an asset.
Recognising and realising the value of sustainable real estate
These complexities, and the need to reliably assess and distinguish properties with sustainability credentials from the rest, have prompted the development of a number of assessment and certification schemes. The most widely used and successful of these throughout Europe is BREEAM, originally developed in the UK by BRE and managed across Europe through a network of National Scheme Operators. BREEAM has become the certification scheme of choice for investors and developers as it is an internationally recognised standard for sustainability that is applied on a national basis.
Over 535,000 buildings have now been certified (and 2,217,955 buildings registered) under BREEAM, BREEAM is used in over 70countries around the globe.
Using independent, licensed assessors, BREEAM examines scientifically-based criteria covering a range of issues in categories that evaluate energy and water use, health and wellbeing, pollution, transport, materials, waste, ecology and management processes. Buildings are rated and certified on a scale of ‘Pass’, ‘Good’, ‘Very Good’, ‘Excellent’ and ‘Outstanding’. BREEAM covers new and existing buildings, and is developing a number of schemes aimed specifically at the refurbishment market.
Value to investors, developers and owners
There is an increasing evidence base that BREEAM-rated buildings provide increased rates of return for investors, and increased rental rates and sales premiums for developers and owners. A study carried out by Maastricht University and published by the Royal Institution of Chartered Surveyors (RICS) in March 2012 entitled “Supply, Demand and the Value of Green Buildings” provides empirical evidence of the value of BREEAM certified buildings. The study used a sample of office buildings in London, using data from transactions and found that these buildings achieved.
- 21% premium on transaction prices
- 18% premium on rents
It should be noted that building quality is not taken into account, and there is a ‘gentrification’ effect whereby individual building values can decrease relative to the supply of other green buildings in the neighbourhood.
New – BREEAM In-Use International
Whilst BREEAM’s initial focus was on single, new buildings, the BREEAM family now also includes ‘BREEAM Communities’ for major developments, ‘BREEAM Refurbishment’ and ‘BREEAM In-Use’. BREEAM In-Use was developed to improve the sustainability and reduce the operating costs of existing buildings. Following its success in the UK there has been a growing interest in the scheme in other countries. To give those outside of the UK the opportunity to gain full certification, ‘BREEAM In-Use International’ has been developed.
For more information on BREEAM, go to:
+44 (0)1923 664462
You can also view a map of BREEAM certified buildings across Europe (since 2008) at www.greenbooklive.com/breeamlive.