The Green Initiative: 6 Reasons Why Sustainability is Shaping the Real Estate Landscape

by PRIME Philippines Research & Advisory Group  May 29, 2020

More investors are recognizing that a green building’s capacity to attract and retain tenants is conducive to improve business performance in the long run. But more than just business performance, prioritization on human health and wellness is driving innovations within the development landscape. With the pandemic threatening the condition of workplaces, the adoption of green building systems has been gradually growing as it improves employees’ well-being and increases long-term impacts from the effects of climate change.

 

Increased comfort and well-being of employees

Green buildings can produce a positive impact to employees within the building or to simple passerbys by generating their own energy or increasing biodiversity. Based on a series of Harvard University studies, green buildings can boost employee productivity in terms of cognitive function by as much as 101% when ventilation is enhanced. 

 

Building longevity

Construction materials used in green properties are more durable compared to traditional materials, albeit more costly. In order to minimize waste, property developers make sure that every material used for the development is used to maximum effect and can withstand damage caused by calamities and wear-and-tear.

 

Cost-efficiency

Solar and wind energy, along with energy efficient equipment and machinery, can also, according to the production schedule, reduce long-term electrical costs, water consumption, and other operational costs. Though initial construction costs may be more expensive than traditional ones, lower operating and energy costs indicate that green buildings offer a long-term return on investment.

 

Value-adding investment

In 2016, Dodge Data & Analytics, a leading provider of analytics and software-based workflow integration solutions for construction industries, reported that building owners that manage green buildings - whether new or renovated - command a 7% increase in asset value over traditional buildings. In the Philippines, LEED, WELL, and BERDE-certified buildings can instigate higher rental fees and selling prices due to the cost of applying for these certifications, as well as the cost for managing the green building system of the development. 

 

Marketability Boost

Green buildings can make a company more marketable since an increasing number of people and organizations are becoming more conscious of the environment, yielding to increased market value and long term resilience. Through this, incorporating and highlighting buildings’ sustainability specifications in marketing strategies can strengthen building or developer reputation.

 

Diversification of investor portfolio

Investors and developers are increasingly looking to diversify their portfolios and exploring unconventional assets for returns. The increasing attention towards green developments is an ideal opportunity for investors and developers to enter the growing market and diversify their portfolio. Not only will developers and investors be immersed in green investment, but also be able to broaden the scope of their expertise.

 

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