Why Invest? Energy Efficient Property
The market for energy efficient property is growing and could represent a sound investment.
Some reasons why energy efficient buildings are a sound investment:
i) Lower energy costs
Reduced energy is a huge consideration and green buildings commonly use less than half as much energy as conventional buildings. The improved building envelope and energy-efficient equipment accounts for much of this benefit. In addition to reducing energy usage, many green strategies lower peak energy demand and this further helps reduce energy costs. The continual rise in energy costs means that green buildings will be more in demand from potential occupiers.
ii) Greater durability and less repairs
Greener buildings are mostly newer builds and are tested to rigorous building standards and are quite durable. Repairs and replacement of any failed building components are less common. Although durable building products cost more upfront to purchase, their life-cycle costs are often lower as compared to more conventional building products. Likewise, there can be lower cleaning and maintenance associated with green buildings.
iii) Increased property values
Reducing building operating costs can potentially boost property values and particularly with any income-generating (rental) property. As the lower operating costs result in an increase in net operating income (NOI). Although property values are affected by many complex factors, it has been suggested that increasing the NOI of a building increases the building's appraisal value by ten times the annual cost savings (According to the publication: A Design Professional's Guide to High Performance Building Benefits, published by the New Buildings Institute).
iv) More rapid lease out
The fact that green buildings often lease out more quickly than conventional buildings, and often with higher rental prices means that this minimises the period where a lease property remains unoccupied and thus reduces carrying costs and resultant increased profits. Reasons for this include media exposure about the environmental and health features, low operating costs, enhanced comfort and word of mouth about the look and feel of such buildings.
v) Positive public image
A positive public image about a company and its commitment to environmentally responsible buildings can be tremendously beneficial. It can help sell more spare space in a building, save advertising cash and champion the company's credentials as a Corporate social citizen. Eventually, this may translate into more sales and higher profitability for the company's goods and services.
vi) Reduced global warming impact
Green buildings use less energy and consequently release less carbon dioxide through their operation; resultant in a lower carbon footprint. They require less transportation energy for their occupants, or avoid release of other harmful greenhouse gases and are seen to contribute less to global warming.
