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Embracing The ‘Green’ Trend

By on Aug 23, 2011 in Office

Special for the Nation, Published on August 15, 2011 by Aliwassa Pathnadabutr, Managing director of CB Richard Ellis (Thailand) Co., Ltd.,

The trend for eco-friendly office buildings has been around in Thailand over the past few years. When the trend first emerged in 2009, it remained unforeseen whether the trend was here to stay or whether this was just a passing fad. Two years on, it is clear that the green trend has been embraced by the market and is likely to stay on as global warming has been having an effect on the environment and people’s life.

With increased awareness for environmentally sustainable developments, developers can obtain an accreditation to endorse their buildings.

LEED, a system from the United States is one of the most commonly known and used accreditation, which is also beneficial for marketing purposes and in promoting office buildings to potential tenants.

To qualify as a LEED-certified building, the project must be designed to minimise the impact on the environment, while improving the indoor environment for occupants. Features that maximise energy efficiency, water efficiency and the use of sustainable materials are some of the essential criteria.

There are currently three new office complexes in Bangkok, which incorporate eco-designs. Energy Complex is one of Thailand’s first LEED-Platinum certified buildings, while Park Ventures is applying for a LEED Platinum certificate and Sathorn Square is applying for a LEED Gold.

The justification of higher building costs for green buildings against its benefits is now more apparent than in the past. Construction costs for green buildings are at least 5 to 10 per cent higher compared to standard Grade-A offices due to added-on features and engineering systems that maximise energy efficiency and reduce electricity consumption.

For example, Park Ventures incorporates eco-friendly concepts such as specially coated glass, natural light-balancing sensors, water reusable features and a variable air volume air-conditioning system, as well as features green spaces that exceed the EIA requirement.

These additional features all add to construction costs, but despite the immediate up-front costs which are higher, the green building trend has succeeded because of its significant long-term cost-saving benefits, especially for landlords.

The value of green buildings is underpinned by its long-term energy-saving, maintenance cost reductions and increased building value for sale and rental. In Thailand, the concept of green offices is relatively new, with very few buildings that are operational. Therefore, we cannot yet determine exactly how much is saved in the practice. In principle, we expect the energy savings to be in the region of 20 to 30 per cent.

The increase in rental value is not yet clearly seen, but lower operating costs will definitely reduce the payback period for the landlord.

In a highly competitive market, landlords also have the marketing edge against other standard Grade-A offices, particularly in terms of attracting multinational tenants who increasingly put more focus on sustainability policies, which could extend to the criteria for office selection. Being a “green” developer also has positive marketing and branding implications for the company and its Corporate Social Responsibility programme, especially in a market where environmental sustainability plays a growing role.

From the tenants’ perspective, the energy savings may not be reflected substantially as most rents are inclusive of service charges and air-conditioning, and only electricity charges from lighting will have direct savings impact. But tenants who pay attention to staff health and working environment will find beneficial features such as improved indoor air quality, an allocated bicycle parking space and a direct BTS link, which is an important consideration for all tenants. Easy access to mass-transit systems is also a point accredited by LEED as it helps promote usage and reduces the need to use up fuel.

With new green office buildings now coming close to completion, landlords and tenants have a growing awareness of the benefits of a green building and are now embracing this eco-trend, which is set change the future of office buildings.

Aliwassa has been the Managing Director οf CBRE Thailand for a number of years. As a Thai national, Aliwassa is extremely knowledgeable about the sale of property in Thailand, specifically large scale high value condominium developments largely in Bangkok.

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