A new study by the Investment Property Databank (IPD) and the Green Building Council of South Africa (GBCSA) shows that EE buildings deliver better financial results.


Energy-efficient commercial buildings are an important investment decision for property and business owners alike, proves a new study by the Investment Property Databank (IPD) and the Green Building Council of South Africa (GBCSA). Their study investigated 461 commercial buildings and showed that energy-efficient buildings yield better financial results.

The results of the study, which were released on 22 September 2014, found that the top quartile energy-efficient (EE) properties delivered a 15,9% total return, 170 basis points higher than the remainder of the buildings, which delivered a total return of 14,2%. In addition, while the income returns generated by the two samples of properties were the same, the EE properties achieved a higher capital growth of 8,1%.

The buildings that were investigated are owned by some of the most respected property owning companies, namely Growthpoint Properties, Hyprop Investments, Investec Property Fund, Liberty Properties, Old Mutual Properties and Delta Property Fund, to name a few.

“The index confirms that investing in energy-efficiency is good business for property owners. It is set to become an important tool to drive even more sustainable and efficient buildings in the country,” said Brian Wilkinson, chief executive officer of the GBCSA.

“Green leadership is having a huge impact on commercial property in South Africa. The benefits for users of green buildings have already been widely established. We also wanted to show the impact of green building and efficient building management on the financial performance of a building to further support the case for green innovation in the South African property sector,” said Wilkinson.

Dawie Kriel, head of engineering at Energy Partners, says that implementing a holistic EE plan is often simpler than expected and will essentially always yield immediate and sustainable returns on investment.

“With a long-term investment view, a saving of 50% is quite achievable. There are also innovative financial support instruments available to make the initial investment in EE solutions easier. In most cases the initial interventions could have very little capital investment requirements. We have even seen savings of up to 15% from improved behaviour and corrective maintenance of existing systems. However, this is not guaranteed for any owner, and this is where the understanding of the energy use baseline is an invaluable tool,” said Kriel.

An in-depth understanding of the energy use profile and its components is key to transforming an existing building’s energy consumption, explains Kriel.

“It is important for business and property owners to focus on the areas that have the greatest impact on energy use at the best return on investment. The first step is measuring the energy use (be it electricity or other sources) and creating a baseline of consumption for the whole as well as its subcomponents,” adds Kriel.

“We can now say with confidence that, in South Africa, green building is a real win-win, because it is now proven that both owners and occupiers of green buildings gain significant and meaningful benefits. And our environment wins too,” concludes Wilkinson.

For more information, visit www.sapoa.co.za, to which full thanks and acknowledgement are given.