Green buildings benefit owners, tenants and society
Cash van Halder, Chief Operating Officer, Zureli and Simon Lee, Senior Manager, Sustainable Business HK
“Green building is already widely adopted globally, with strong growth expected in most countries, but most particularly in the developing world.”
That is the key finding of World Green Building Trends 2016, which reveals that green projects – those certified or built to qualify for green standards such as LEED or BEAM – account for almost a quarter (24%) of construction activity among the companies surveyed. In China, that rises to 28%, with the proportion of Chinese companies delivering 60% or more green projects expected to grow rapidly, to 28% by 2018.
The trend benefits a range of businesses including building tenants, property developers and managers, investors, and suppliers to the construction industry:
- Efficiency and cost-effectiveness. While the upfront capital costs of green buildings are often higher, they have a quick return on investment due to reduced operating and maintenance costs. According to a study by the Hong Kong Green Building Council (HKGBC) and Swire Properties, the cost-saving for existing buildings after a major retrofit can be as high as 45%, through improvements to ventilation, lighting, electrical installations, lifts, escalators and more.
- Increased demand and property values. The key factors that determine property values are still location, size, condition and design. However, growing awareness and demand for sustainability means that buyers and tenants are willing to pay more for green buildings. In Singapore, green retrofits caused capital values to rise by around 2%, while in the US, average leasing rates rose by to up to 20%. A Cambridge University study also confirms lower vacancy rates in green buildings.
- Improved employee productivity. Worker absence can significantly impact productivity. Green design emphasises natural lighting and ventilation, which helps to safeguard employees’ health. A US study suggested improved indoor environments could save $6 to $14 billion from reduced respiratory disease, $1 to $4 billion from reduced allergies and asthma, and $20 to $160 billion from improvements in worker performance unrelated to health.
- Demonstrate corporate responsibility. As well as energy-efficiency, green building features include onsite generation of renewables, rainwater and greywater recycling, and ‘green envelopes’ like vegetated walls and roof gardens. According to a report from Arup, green envelopes can reduce localised air pollution by up to 20 per cent, reducing toxic air at street level and thus improving public health. This is particularly relevant in high-density Hong Kong, and helps companies demonstrate their commitment to corporate responsibility.
- Growing market for green products and services. More green projects means rising demand for suppliers of green building products like recycled concrete, FSC-certified timber and energy-efficient windows – as well as for service providers like Energenz, a Hong Kong-based energy-efficiency advisor, or Liquid Interiors, an eco-conscious design consultant. The global market for green building materials alone was estimated at $157 billion in 2014, and set to exceed $364 billion by 2022.
Green building in Hong Kong
Hong Kong already exhibits a number of innovative green building developments and features. For example, Sino Land has installed solar and wind energy systems in residential, office and retail developments including Pacific Palisades, Skyline Tower and The Avenue. Swire Properties’ plans for the redevelopment of One Taikoo Place promise the city’s first waste-to-energy trigeneration system in a commercial office tower.
Fittingly, the government’s new sludge-to-energy facility, T·PARK, is not only energy and water self-sufficient, but uses sustainable materials such as low-emissivity glass, reclaimed timber and ‘echo-panel’, an acoustic wall material made from recycled plastic.
Yet a number of challenges lie ahead. Hong Kong’s construction industry faces a shortage of between 10,000 and 15,000 skilled workers overall; the growth of green buildings will increase demand for qualified people in many areas, from manufacturing to demolition, to building operations and maintenance. Upskilling the relevant sectors and attracting young people to those industries will require time and investment.
Another challenge is a lack of knowledge and awareness among companies of the range of green building products, services and technologies available. To remedy that, HKGBC co-organises and supports a number of conferences and events, such as the Eco Expo Asia later this month, and the Hong Kong Green Building Week, which took place in September. HKGBC also runs the biannual Green Building Awards.
Additional platforms are needed for green innovators to showcase their products and services on an ongoing basis. Earlier this year, Singapore-based social enterprise Zureli launched a new online marketplace and network focused on connecting green building professionals with solutions providers around the world. Its members include JLL, AkzoNobel, and the Green Building Councils of Korea and Vietnam.
Green buildings are not yet the norm here in Hong Kong, or indeed in Asia more widely. But the sector is growing rapidly, presenting opportunities for new and better ways to do business for companies across a wide range of sectors.
It is often necessary for companies to seek new premises, property investments or product and service innovation opportunities. When they do so, they may find they can benefit greatly by pursuing green building solutions.