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Sam Somashekar
Green Building Sector Continues to See Explosive Growth - 6:11 AM
The commercial building sector as a whole may be seeing a bit of a slow-down, but the same is definitely not true of the commercial green building sector. With more and more tenants willing to pay a premium for green building space in an effort to lower operating costs, increase worker productivity, and boost corporate image, the future of the green building market is very bright indeed.
The USGBC has put together a great Green Building Facts sheet, which highlights just how much potential there is within the green building industry:
- The commercial green building market share grew from 2% in 2005 to 35% in 2010, despite the economic downturn.
- Green commercial construction will represent 40% to 48% of the market by 2015 with a value between $120 and $145 billion.
Given that buildings represent 41% of US energy use, which is ahead of industry (30%) and transportation (29%), the chance to save 25% on energy and 11% on water with buildings that meet (for instance) the LEED Gold standard is extremely attractive to tenants.
Owning a green building is also extremely profitable, which is why more investors are opting to reach for green building standards. In light of this fact, and given that 61% of all construction projects are retrofits, it’s no wonder that the green share of renovation projects is set to triple by 2015.
Take RREEF, a member of the Deutsche Bank Group and real estate investment and risk management consulting firm, for example. They’ve recently published their first annual Real Estate 2011 Sustainability Report. Representing a commitment on the part of RREEF Real Estate to sustainability, the report, which was published in December 2011, also details how it views the importance of green buildings for delivering the maximum value to its clients.
RREEF’s Global Head of Real Estate, Pierre Cherki, commented, “Around the world, a significant percentage of primary energy use is from commercial buildings, and we therefore strongly believe that a sustainable approach to real estate investment management is crucial for the long term. Increasingly, our investors are demanding sustainable investment options while tenants seek more environmentally considerate workplaces and homes.”
Most telling is perhaps the fact that RREEF Real Estate has adopted their own set of guiding principles for sustainability to ensure not only that their buildings are highly desirable, but also highly profitable. This is a trend we are likely to see repeated throughout the globe as the financial benefits of green buildings become more apparent.
