IPD to launch a green property investment index
28 December 2010
By Tina Perinotto
18 November 2010 –Two announcements this morning from the heartland of the capital markets may be about to usher in a new era for green buildings that can finally provide evidence of their greater value.
In Sydney Adrian Harrington, chairman of IPD, said the property investment information house that publishes investment performance indices for property, would launch a green building investment index at the Green Cities conference in February next year.
The index, which had not yet been named, would link the sustainability profile of a building with its investment performance at the asset level, IPD managing Dr Anthony De Francesco told The Fifth Estate after the forum.
He said his organisation was currently collecting data on energy consumption – including green power and the proportion of green power used in a building – as well as NABERS Energy ratings and Green Star ratings.
In the US CB Richard Ellis released a survey at the mammoth Greenbuild conference underway in Chicago this week that showed green buildings were expected to generate strong returns.
“Owners of sustainably managed buildings anticipate a 4 per cent higher return on investment than do owners of traditionally managed buildings, as well as 5 per cent increase in building value,” the real estate consultancy said.
And the owners are convinced.
“Roughly 79 per cent of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5 per cent increase in building occupancy and 1 per cent increase in rental income.”
A statement from CBRE said: “The survey is the second phase of a multi-year study initiated in 2009 by CB Richard Ellis and the University of San Diego’s Burnham-Moores Center for Real Estate.
“This year, CBRE also collaborated with McGraw-Hill Construction to expand and publish the survey. The largest and longest running study of its kind, the ongoing analysis benchmarks and measures green building benefits and resulting economic outcomes as a framework of investment criteria for retrofit activity.
“The study’s initial findings were made public today at US Green Building Council’s Greenbuild as part of McGraw-Hill’s The Business Benefits of Green Buildings: Building and Occupant Performance Driving Green Investment in Existing Commercial Buildings SmartMarket Report.
“A full update to the study’s 2009 report Do Green Buildings Make Dollars and Sense? is expected to be released later this year.
“According to the study, tenants in sustainably managed buildings report increased productivity, satisfaction and health. Roughly 10 per cent of tenant respondents have seen increased productivity, 94 per cent of tenant managers registered higher employee satisfaction in green space and 83 per cent of tenants believe their green space provides a healthier working environment.
“The study defined a green building as those with LEED certification at any level or those that bear the EPA ENERGY STAR ® label. All of the ENERGY STAR ® buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.
“This report follows two industry-leading publications released by CB Richard Ellis earlier this month. Key members of the US Sustainability team co-authored the USGBC’s Green Operations Guide: Integrating LEED into Property Management, a guide that enables building owners and managers to better understand LEED EB: O & M benefits, and provides practical tools for improving the sustainability of their portfolios.
“Additionally, CB Richard Ellis’ Law Firm Practice Group released a special report Law Firms Build a Case for Green: Recent Trends in Law Firm Sustainability Practices. The report highlights sustainability practices among US and global law firms, including the trend towards pursuing LEED [green building] certification, and considers costs versus yield of select sustainable strategies.”
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