Back in 2005, the publication âPutting a Price on Sustainabilityâ calculated that a BREEAM Excellent rating for an air-conditioned building could incur an additional 7% in capital costs to achieve. However, the 2014 BRE/Sweett Group report âDelivering Sustainable Buildings, Savings and Paybackâ put the capital cost uplift for scoring an Excellent rated an air-conditioned office around 0.9% (in a location with âgoodâ public transport links).
From 7% to as little as 0.9% in just 10 years is testament to the extent that BREEAM has driven the green building agenda. This has been achieved most notably through:
- building economies of scale that support innovation diffusion and the consequential fall in technology cost;
- streamlining and integrating environmentally sound production management process and techniques;
- developing green building design and management skills capacities throughout the design and construction sector; and
- increasing acceptance of the need to deliver and manage a sustainable built environment across a variety of stakeholders such as clients, financial managers and policy makers.
While most decisions in the construction sector are based on capital or direct life cycle costs, the wider financial and corporate benefits of sustainable buildings, which can far outweigh these, are not always considered.
HoweverâŚ times are changing.
In 2012, Schneider Electric, BSRIA and BRE interviewed BREEAM users to determine the perceived benefits of sustainable buildings. Although only 43% saw operational or life cycle cost savings to be a benefit, 77% saw the major value in increased market recognition or industry standing. Next on the list in terms of benefits, were improved occupant satisfaction, a reduction in construction waste and the more efficient use of materials. Research by law firm DLA Piper found that, of EU property clients surveyed, 97% considered certification important in attracting higher profile tenants that are willing to invest more in BREEAM rated assets.
In addition, 2014 saw one of Europeâs largest commercial property companies, Unibail-Rodamco, issue a âŹ750m bond based on a portfolio of green buildings. To be included in the portfolio, buildings had to achieve or exceed a BREEAM âVery Goodâ New Construction rating and at least a BREEAM in-Use âVery Goodâ rating (within 3 years of opening). The bond was 3.4 times oversubscribed in under 2 hours and the price paid for the bonds by investors is saving Unibail-Rodamco over âŹ500,000 a year in interest payments.
Furthermore, AXA Invest Managers â Real Assets have a policy that 75% of their real estate assets undergo an environmental assessment by 2030. Not only will this reduce operating costs, it will improve the long term value of their assets (to the benefit of both investors and tenants) and cement AXAâs place as industry leaders in sustainability.