Why design or build a green commercial building?

The information in this article could be out-of-date or no longer relevant.

The benefits of designing & building green commercial buildings

The business case for designing and building green buildings continues to stack up. Green buildings deliver a range of business benefits including:

>    Higher return on investment
>    Attract tenants
>    Time and resource efficiency 
>    Environmental benefits
>    Market recognition

Higher return on investment
Green buildings deliver consistently higher returns on investment compared their non-green counterparts.

  • The Building Better Returns report (2011) found that Green Star-rated buildings deliver a 12% ‘green premium’ in value and a 5% premium in rent, when compared to non-rated buildings.
  • The Property Council/IPD Australian Green Property Index (2014), found that Green Star-rated CBD office assets delivered a total annualised return of 10%, outperforming the CBD office market by 100 basis points.
  • World Green Building Council’s Business Case for Green Building (2013) found that price premiums for green buildings could be up to 30% – with evidence that the higher level of certification, the best results.

Green proves gold for Pixel Building


The $6 million transaction, though modest, netted $1 million more than a similar sized, similar quality office without a Green Star rating would. Read more in the Pixel Building case study.
Purchasers are increasingly attracted to unique, innovative and sustainable buildings.
Daniel Grollo – Former Chief Executive Officer, Grocon

 

Attract tenants

Greener buildings have a competitive edge and can help to attract prospective tenants.

  • The GBCA’s Valuing Green (2008) report found that green buildings attract better quality tenants, such as government and ‘top tier’ corporates with stable businesses and strong commitments to corporate social responsibility.
  • World Green Building Council’s Business Case for Green Building (2013) found that buildings with a green rating report an occupancy rate increase of up to 23%. The higher the rating, the higher the rental premium – with an average 3% increase in rent for each additional level of certification.
  • Colliers International’s Office Tenant Survey (2012) found that 95% of tenants want to be in a green building, up from 75% two years earlier. ‘Green space’ is one of the top four attributes tenants look for for – along with bike racks, childcare facilities and a gym.
  • CBRE’s Do Green Buildings Make Dollars and Sense? (2009) found that that green buildings have 3.5% lower vacancy rates and 13% higher rental rates than the wider market.

For Australand, the driver for achieving a Green Star rating for The Key Spec 1 building in Melbourne was simple – the advantage it can provide in securing tenants. Read more The Key Spec 1 case study.

Time and resource efficiency

  • Key to the Green Star process is an integrated team approach to design which often leads to fewer design conflicts and change orders in the development process.
  • Developers on Green Star-rated buildings often report that a clear vision helps time and resources to be used more efficiently from day one.
  • According to the World Green Building Council’s  Business Case for Green Building (2013), there has been an overall trend towards lower design and construction costs as building codes become stricter, supply chains mature and the industry becomes more skilled at delivering green buildings.

Environmental benefits

Building green is a clear expression of commitment to the environment.