Greening of the real estate industry

GREEN ARCHITRENDS

By Amado de Jesus
Philippine Daily Inquirer
Posted date: August 22, 2009


YOU MAY not realize it but the green movement is slowly transforming the way real estate brokers and appraisers are doing their business. Where it used to be location, location, location as the most significant factor that buyers considered, there are now other issues like energy efficiency and indoor air quality, among others that buyers also consider. People look for green and sustainable building features because they put a premium on health and comfort.
As designers, developers and building owners keep up with the latest trends in green building, real estate brokers are now finding that they also need to keep up as more and more buyers are going green in their purchasing habits.

Green buildings preferred

How do green issues come into play in the decision making of buyers?

One example comes to mind. At the height of the financial crisis, a major Asian city had two identical buildings in the business district. One was a green building, the other one was not. Which one had more tenants? The green building, why? Tenants of the conventional building felt the crunch of high energy and water costs. They eventually moved to the green building.

Utility costs constitute 28 percent of operating costs in downtown offices and about 30 percent in suburban properties. Developers and building owners look for quick payback and cost savings that energy efficiency and other green strategies offer.

Reduced operating costs and more satisfied occupants mean higher occupancy rates, higher rents and increase in the value of the building.

According to a recent study by the United Nations green buildings can do more to counter global warming than all curbs on greenhouse gases under the Kyoto Protocol.

In many countries, more and more clients and tenants show a preference for green buildings, which have shown to boost productivity and lower absenteeism.

The demand for green buildings may not be as great here in the Philippines compared to the United States or Europe. This is now slowly changing as more and more Filipino workers from abroad come home to settle and expect similar if not equal building standards that they enjoyed abroad.

This is quite significant considering that many local projects and developments are aimed at this market niche with their huge dollar earnings. One developer I know claims that their foreign market share is 70 percent of their total revenues.

What can the industry do?

First, real estate firms will have to update their officers and members on the basics of green design and development. Knowing what they are promoting is the most important step in the greening of the industry.

Real estate brokers need to appreciate sustainable business practices and green technologies. They can help both the buyers and sellers of properties when it comes to enhancing the value of their properties.

The real estate industry can lobby for needed infrastructure development because housing projects that are far away from public transit, services and places of work are not sustainable. Houses far away from urban centers run the risk of falling property values and even bank foreclosures.

Real estate brokers and appraisers play a vital role in the building industry. Green architecture is not confined to designers and builders alone.

For comments or inquiries, e-mail amadodejesus@ gmail.com.