Romilly Madew explains how you can future-proof your property investment by being eco-friendly.
In the last few years, a dawning eco-consciousness, together with soaring energy prices and tightening environmental laws, has increased the demand for green buildings.
In the commercial real estate sector, a ‘green revolution’ has transformed the industry and the vast majority of new buildings are created to increasingly high environmental standards.
Now the residential market is undergoing a green makeover and investors are beginning to recognise that green features are not only good for the environment, but their nest eggs as well.
In 2009, the Green Building Council of Australia released the Green Star – Multi Unit Residential tool to rate the design attributes of green residential facilities around Australia.
While only a handful of residential facilities have received Green Star ratings in Australia, 11 per cent of commercial buildings are now Green Star certified, and we expect the Green Star to penetrate the residential market in a similar fashion.
In the United States, buildings certified by the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system, are driving residential tenants’ expectations through the roof.
For example, The Solaire in New York City was the first high rise residential project to receive LEED Gold Certification for environmental features, which substantially reduce electricity and water consumption.
Green buildings are easier to market in an environment where people want to be a part of the solution to climate change. Blair Towns in, was the first LEED-certified apartment community.
It continues to attract tenants by providing a 36 per cent reduction in energy costs, proximity to transport and onsite shopping and restaurants. Back in Australia, higher energy efficiency standards and tighter government regulations are on the horizon.
In 2009, the Council of Australian Governments (COAG) agreed to increase the energy efficiency standards within the Building Code of Australia to a minimum six star rating for all new residential buildings.
In addition, from July 2010, all commercial buildings more than 2,000 square metres will be required to disclose their energy efficiency rating at the time of lease or sale.
While this measure currently applies to commercial buildings alone, it will only be a matter of time before such regulations are introduced, which will apply to residential developments as well.
‘Future proofing’ is about anticipating and adapting to change, rather than simply reacting. By choosing a building with green features, you can protect your investment against future regulatory changes.
With governments increasingly mandating green principles and energy efficiency requirements, going green early is certainly a smart financial decision.
Romilly Madew is the chief executive officer of the Green Building Council of Australia