The Business Case for Green Building in Serbia

The Business Case
for Green Building

© 2012 Yudelson Associates
Jerry Yudelson
Yudelson Associates
February 2012

Take-Aways

Green building is vital for controlling
global CO2 production

Green building is here to stay
• 45,000 LEED Registered Projects
• 130 countries

Benefits are significant for all
building types

Water saving next major green focus

Green Building Important for Carbon Reduction


Life-Cycle-Cost Positive Solution

Buildings are the only Life
Cycle Cost-positive solution

25% of total carbon solution
can come from buildings,
including homes, stores,
offices, hotels, institutional
buildings and other
structures

EMGP 270 Paris, HQE Certified

Triple Bottom Line

Profit
 Financial return
 Marketing & PR
 Higher Productivity
Planet
 Less carbon, waste and
energy and water use
People
 Job satisfaction
 Healthy work environment


Range of Proven Benefits

Absenteeism
Rental Rates

Carbon Emissions
Occupancy Rates

Energy Costs
Office Productivity

Hospital Stays
Factory
Productivity
Waste
Retail Sales
Management Costs

Per Square Foot

Performance on School Water Usage
Tests

Importance of Building Green

By the year 2040, 75% of
U.S. buildings will be
either new or renovated,
vs. 2010 (23 billion m2)
In Eastern Europe, focus
is likely to be more on
greening of interiors,
whole building renovations
and existing buildings.

40 Grosvenor, London

Green Building Is Growing Rapidly


U.S. Green Building Statistics

45,000 LEED registered
projects (Jan. 2012)
10,000 LEED certified
projects (Jan. 2012)
175,000+ LEED Accredited
Professionals
Similar results for UK’s
OREGON BREEAM; DGNB gaining
HEALTH & SCIENCE acceptance

UNIVERSITY

Central/Eastern Europe LEED Activity

Country Cumulative LEED Other Countries
Project Registrations
(through January 2012)
Poland 56 Bulgaria: 7
Hungary 24 Ukraine: 4
Czech Republic 33
Austria 17
Croatia 9
Romania 10
Serbia 10
Slovenia 2

Slovakia 6
Estonia 1 Nokia Jucu
Factory, Romania, LEED-NC
Latvia 1 Gold
Total 180

Green Buildings Make Money Sense

Genzyme Corp. Headquarters, Boston, Behnisch Architekten

Business Case for Green

Financial/economic return
Risk management
Marketing/public relations
Productivity and health
Recruitment and retention
Policy directives
Investor interest is high TNT Express Headquarters
Amsterdam
Sustainability concerns LEED-NC Platinum

Zero Carbon Emissions

Study Results

Energy Star
Buildings vs. Peers
 $26/m2 rent premium
 3.6% higher occupancy
 Selling +$66/m2
LEED Certified
Buildings vs. Peers
National Renewable Energy
Laboratory, Denver  $122/m2 rent premium
Zero Net Energy Building  4.1% higher occupancy
LEED Platinum  Selling for +$1870/m2!


LEED Rent Premium

Gross Rents
Office, 5 stories plus, 200,000 to 1 Million, Multi-tenant
38 Source: CoStar

36 35.45
35

34

31.97
32 31.36 31.43 31.25
30.99

30
28.99 29.07 Energy Star
LEED
28
Overall

26

24

22

20
Q42007 Q42008 Q42009

RICS Study Results

Based on 2008 Data: 893
certified U.S. buildings,
10,000 non-certified within
0.4-km
Conclusions:
 Effective rent 6% higher
 Sales price 16% higher
 Green upgrade adds
$5.5 million (€4 million)

Marks & Spencer Plan A
to value

Relevance to Central/Eastern Europe

Green building worldwide
Uptake is rapid
Property sector similar in
many European countries
Global companies want
green spaces
Europark Salzburg Investors want green
Green Retail Space
buildings


Great Projects – Begin With Great Goals

Hagaporten 3, Stockholm

CSOB Bank, Prague


Lintulahti, Helsinki

Solon Corporate
HQ, Berlin


Wunderlich
Haus, Eberswalde, Germany

SAP Call Centre,
Galway, Ireland

Productivity Counts

Most costs are “people
costs”
Studies show 3-7% gain
in workplace productivity
 A 1% gain in
productivity pays all
the energy bills
 A 10% gain in
productivity pays for

the entire building (or
the technology)!

Marketing and Public Relations

BREEAM, LEED, DGNB
Ideal tools
Many European projects
registered under US LEED
Save energy, water, waste
disposal costs
Create green brand
Low-cost options available

RWE Essen, Ingenhoven Architekten

Greening Existing Buildings:
The Next Big Challenge

63 million m2 certified
Largest LEED system
International
registrations up 22% in
2011
Hines, Stuttgart, Germany Also covers major
LEED Core and Shell Gold renovations
Hines, 26,000 m2


What Does This Mean in Eastern Europe?

Green certifications add
value
Re-brand older spaces
Large global companies
want green office space
Payback/ROI ~1-2 years
Prevent value erosion of
existing holdings


Water the Next Big Issue


Preventing Urban Water Crises

• Urban water crises are
likely to increase
• Good design & practice
can reduce water use
+50% in buildings
• Retrofits can reduce water
use 35% to 75%


Water Design Standards

• Control site irrigation &
cooling tower water use
• Look at entire water cycle
– Match quality with end use
• U.S. good practice
– 600 L/m2/year
• Australian best practices:
– 400 L/m2/a
• German averages:

– 200 L/m2/a

Nuremburg, Germany

Future of Green Buildings in CEE

Tenant demand + superior
environmental performance
are major driving factors in
making green buildings
mainstream. However, stricter
government regulation in the
EU is likely to be the main
reason for green buildings to
become the de-facto standard
for new + renovated buildings
in 10 years.
--Deutsche Bank

Research, April 12, 2010.

The Future is Green, But…

If you want to score, run
to where the ball is
headed, not to where it is.
Ask yourself and your
clients: how green will the
built environment be in
2015 to 2020?
Non-performing green
buildings will pay a

penalty in that market!

Jerry Yudelson
Yudelson Associates
February 2012

ОДЛИЧНО!


The Business Case for Green Building in Serbia

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