Energy Watch

South Africa proves green buildings make economic sense

Green buildings, the way to go

“Going green” with buildings has globally moved past the ‘fad phase’ and South Africa has taken the lead in proving it makes economic sense. 

 Green building has of late quickly become a key asset in any serious property portfolio. Pioneered in the residential market, it has aggressively crossed the border into commercial property territory to become a key feature of all new town planning, be it residential, commercial, industrial or mixed-use purposes.

 Apart from its numerous environmental advantages, increasingly investment funds, companies’ balance sheets, and stock exchange data support the notion that it makes economic sense. Across Africa too there is ample evidence of this.

 South Africa takes the lead

 South Africa plays a leading role in this regard, not only in Africa, but also globally. Within a few years South Africa became the fastest-growing green building property market in the world.

 Late last year the World Green Building Trends report published by US-based McGraw Hill Construction found that South Africa was by then the fastest-growing green building region in the world. What is more, the expected increase of design, architecture, building and construction firms in South Africa actively involved in green building projects is to go from 16% to 52% between 2012 and this year.

 Of the South African firms that participated in the survey, 60% said they would engage in future green commercial developments by 2015, while 58% said they would be doing retrofits.

 This places South Africa ahead of the global average in the 62 countries on which McGraw Hill Construction tracks trends. McGraw Hill Construction expects the global average to rise from 48% to 51% over the same three-year period.

 "The future for green building is more concentrated in South Africa [than in] other parts of the world, particularly for offices, shopping centres and hotels. However, South Africa is also one of the only countries with a high reported level of green activity in the residential marketplace,” noted the report.

South Africa outstripped well-established sustainable building regions and countries such as the United States, Europe, Brazil, Singapore, Australia and the United Arab Emirates. What makes this achievement all the more remarkable is the fact that South Africa only officially joined the global sustainable development fraternity in 2007 when the Green Building Council South Africa (GBCSA) was established.

 Making economic sense

What made the difference in South Africa was that financial incentives became more realistic and enticing. In a country where business operating expenses are seriously affected by dramatically increased electricity costs and water regulation, businesses were looking around for cost-cutting options.

In the rental market the incentives for landlords were equally attractive. Cost-effectively developed green buildings, it is claimed, will be more desirable and thus drive up occupancy demand allowing for higher rentals.

 The report states that developers in South Africa are focused in the first place on the financial incentive and only secondly on natural resource conservation.

 Studies in the US and Australia have also shown that returns on rental rates of green buildings are approximately 6% and 5% higher respectively.

 According to GBCSA research has revealed that energy savings of between 25% and 50% are achievable in green buildings compared to buildings designed to traditional South African building standards, while payback periods are becoming markedly shorter.

 Executives at the corporate property finance division of Nedbank say the premium previously paid in upfront costs associated with green buildings – as high as 5% for a 4 Green Star building - has substantially diminished. It was also found that building or retrofitting properties using green design principles, could reduce operating costs by around 30% per year.

 Given the latest technological developments, cheaper input costs on green materials and higher electricity tariffs mean that organisations are now able to recoup the cost of green designs and construction within as little as three years.

 SA’s Green Star rating

 Besides GBCSA’s Green Star South Africa rating system, a new green building certification programme has also been brought to South Africa. It resulted from partnership with the World Bank’s International Finance Corporation (IFC). In September last year the GBCSA launched the EDGE rating system, to be utilised for residential homes in South Africa.

By late last year 34 buildings in South Africa had been rated in the 4 Green Star category; 13 in the 5 Green Star category; and three in the 6 Green Star category.

 These buildings comply with criteria reflecting the use of green technologies that ensure efficient and sustainable use of water and electricity, carbon footprint-reducing waste disposal, sustainable and efficient use of space and natural lighting, and the use of recyclable materials, among others. At the time another about 150 projects were also in the registration pipeline.

 Among the three buildings awarded 6 Green Stars is, quite fittingly, the new 30 654 square-metre building of the Department of Environmental Affairs (DEA) in Pretoria - the first government building to achieve a Green Star rating.

 The other two 6 Green Star projects are the Vodafone site solution innovation centre at the Vodacom campus in Midrand, Johannesburg and the No 1 Silo development in Cape Town’s V&A Waterfront precinct.

 Among the projects that earned 5 Green Star ratings are Standard Bank’s new head office in Rosebank, Johannesburg; engineering and construction firm Group Five’s head office in the new Waterfall business park near Midrand; and DSTV City in Randburg.  

 Meanwhile all eyes are upon the emerging new 87,000 square metre global head office of Discovery, scheduled to open in less than four years in Sandton, north of Johannesburg. The building, a joint venture between Growthpoint Properties and Zenprop Property, will cost around R2.6 billion upon completion and will be the largest single office building and one of the most environmentally sustainable ever built in South Africa.

In another development the 18,675sqm North Park in the Black River Park office park in Cape Town, last year became the first building in the country to be awarded an ‘existing building’ certification under GBCSA’s newly launched Green Star SA Existing Building Performance (EBP) pilot tool.

 Other initiatives

 In the residential property field in South Africa equally remarkable environmentally friendly and sustainable building projects have drawn much attention. Among them the new home designed by green architect Ken Stucke for Johannesburg businessman Ivor Jones.

 He wanted a house that could produce its own electricity and gather its own water, free of what he sees as the growing inefficiency of the city council. Stucke’s design won a place among the 15 finalists in the AfriSam-SA Institute of Architects Award for Sustainable Architecture competition.

 On another level there is the innovative redesign by the City of Johannesburg of its regulations and requirements for residential building plans. In future it will require the incorporation of trees and other green features in building plans submitted for approval.

 The city was last year also busy developing a draft ‘tree management policy’ seeking to compel each house to have at least one indigenous tree, a fruit tree and a food garden that can comfortably feed a family of four.

 Thousands of trees had already been planted across the city's seven regions while the city would provide 10,000 indigenous trees and 6,000 fruit trees in the next phase of the project.

 And, in what has been called Africa’s only green city, the multi-billion rand Menlyn Maine green city development in Pretoria is already home to major companies such as Nedbank and BMW. It will soon be adding another 3 Green Star-rated buildings to its portfolio at a cost of R750 million (US$68.2 million).


by Stef Terblanche

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