Green buildings attract buyers

Tenants start to pay less for black buildings: But the biggest opportunities to add value by including sustainability features were in the 90 per cent of buildings in the market that were built before 1990, the report said. Interestingly, the report warned that while tenants still don’t want to pay premium rents for green buildings, at the same time they were increasingly prepared to discount inefficient buildings that did not meet basic sustainability criteria.

Costs of $320,000 investment; "The motivation for the discount is not some altruistic wish to save the planet but a bottom-line cost saving that is reflected in building outgoings and occupancy benefits," the report said. A-grade building of 30,000 square metres, the report looked at what happened with a $320,000 investment in seven basic sustainability practices.

$90,000 a year savings:

•  savings worked out at $90,000 a year;

•  outgoings were cut by 2.2 per cent and

•  valuation increased by $3 million. "The building value jumps from $177 million to $180 million," it said. Other case studies include GPT Office’s view of sustainability, Melbourne City Council’s new headquarters, CH2, and Westpac Banking Corporation’s new headquarters in Sydney.

The Australian Financial Review, 11/4/2006, p. 54