“Green Value” Green buildings, growing assets a new RICS international report

1. “Green Value”Green buildings, growing assetsa new RICS international report A Developer’s View From Jim Green MSc MRICS CES Baylight Properties & RICS Presidential Commission on Sustainability

2. Statutory Purpose – what you must do • Planning & Compulsory Purchase Act 2004 • The statutory purpose of planning has now become the “achievement of sustainable development” • Pension Funds Disclosure Regulations – must publicly reveal ethical & environmental stance and commit to future improvement • EU Green Paper 2001 – Euro framework for accounting standards committing institutions & companies to CSR & TBL

3. The majority of property developers see Green Buildings • “as an interesting but questionable concept that they may have to engage with to obtain planning permission and which is likely to both increase their costs and reduce their profits” • Not sufficiently profitable – not sustainable • Are they the New Luddites ? • Still holding on to old technology – younger generation thinks differently

4. New Orleans – the price of inaction?

5. Green Value Study • RICS- Worlds largest real estate profession. 117,000 members in 123 countries • Professional qualifications FRICS, MRICS, CES • Agenda for Change 2000 – 16 Faculties inc Environment • Resources - Over 400 publications published annually • Green Value Report • Commissioned to develop better understanding of the linkages between Green Buildings and Value to various stakeholders • Green Value Case Studies • 18 project reviews including 3 Universities featured today • www.rics.org/greenvalue Exec Summary / Report / Case Studies / GreenBuild Conference Atlanta Nov 2005

7. Assumption that it costs more to build green Knowledge and research not widespread Green options are poorly understood Steep learning curves Construction companies lack experience Not seen as business benefit Shortage of professionals with suitable experience Insufficient understanding of value and appraisal Outdated regulations Perception of risk amongst lenders, funders Green Value – Key Barriers

8. Green Value Report – Conclusions 1 • Cost does not equal value • Value may exceed cost savings many times – focus on value as well as costs • Value is hard to define; many benefits unquantifiable but undeniable – especially productivity • Distribution of costs and benefits of green buildings varies significantly – occupiers gain • Number of green buildings is small but growing- we are all learning, evidence base needs to grow

9. Productivity Gains • Adding skylighting to retail store increased productivity 40% (Heschong Mahone Gp) • Conversion energy savings gave payback 4.1 yrs / ROI 24% but benefits from lower absenteeism and productivity payback 69 days / ROI 540% (Penn. Power & Light) • CABE “Value of Good Design” - hospital eco renovation gave 21% improvement in discharge rates, care quality, speed, satisfaction, less drugs, reduced visits

10. Green Value: Conclusions 2Soft Benefits (Value) • 85% of a buildings real costs are related to staff/productivity costs – user satisfaction is therefore key • Initial construction costs <10% of a buildings life time costs • Energy is typically 30% of a buildings operating costs • Increased productivity especially through daylighting • Enhanced health and well-being • Higher academic achievement • Higher morale • Reduced absenteeism • Image – branding and symbolising values • More data needed to audit and provide reliable evidence for these

11. Green Value – Conclusions 3 • Limited post-occupancy feedback limits evidence • Strong ties exist between green building and marketing profiles • Regulatory and financial barriers still exist • Cost and time of Certification (LEED/BREEAM) is a disincentive • Importance of integrated design processes / chain of procurement client-led • Positive impact on communities

12. Case Study 1: C.K Choi Building, University of British Columbia

13. Case Study 1: C.K Choi Building, University of British Columbia • Institute of Asian Research • Completed October 1996, @2,788 sq m (gross), owner occupied • 5 research centres, conference facilities, FT occupancy 100 people / capacity 150 • Construction costs ($1578/sq m or £147 psf); total @ $4.4M • $44,000 grant to enhance energy efficiency; private donations 50%

14. Choi Building: Design Features • Tree stands to reduce cooling loads • Internal stack effects (natural ventilation) • Building forms to enhance day-lighting thereby reducing lighting and cooling loads • Enhanced energy control systems • Waste heat recovery • Composting (waterless) toilets • Rainwater harvesting and Greywater collection for irrigation (no sewer connection required) • Zero ozone depleting substances, low solvent, low VOC material specifications

15. Choi Building: Project Successes • Same construction cost as conventional building • 69% reduction in elec. usage compared to ASHRAE standards, saving 191,000 KwH per annum • High recycled content in building materials • 60% primary wood structure • 100% exterior brick cladding • Positive impact on enrolment and University reputation • Learning points: Would have installed a ground source heat pump; natural ventilation is not always easy to manage / better acoustic treatment needed for naturally ventilated areas

16. Case Study 2: Liu Centre, University of British Columbia

17. Case Study 2: Liu Centre, University of British Columbia • Completed Sept 2000, 1747 sq m • Teaching and office areas and public spaces for events, conferences • 37 FT staff • Cost $1774/sq m / £165 psf ; @ $3.1M total • No grants

18. Liu Centre: Design Features • All materials and systems based on Life cycle assessment and life cycle costing • High volume of fly ash concrete • Minimal building width to maximise day-lighting for interiors • Exposed building systems to minimise interior finishing requirements • Free span structure for flexible layouts • Extensive cycling facilities and showing to promote sustainable commuting • High quality salvaged building materials • Non toxic paints and adhesives • Green furniture - board room chairs made from recycled pop bottles • Very low energy and water using fixtures and fittings • Plus many, many more

19. Liu Centre: Project Successes • 92% of previous building on site used as recycled content in building materials • Operating costs lower than for conventional build • Less constrained budgets due to success of Choi Building • All occupants and users given a manual to heighten awareness • Both C.K.Choi Building and Liu Centre have received many International Awards and visits

20. Case Study 3: A.J.Lewis Centre,Oberlin College, Ohio

21. Case Study 3: A.J. Lewis Centre, Oberlin College, Ohio • Completed 1998, 1264 sq.m • Houses Environmental Studies Programme • Cost $3,797/sq m / £352, total $4.8M inc $900K for “Living Machine” wastewater treatment @ $400K and Photovoltaics @ $500K (added 20% to total costs) • Expensive but a showcase project funded by family trust and insurance company

22. Adam Joseph Lewis Centre : Design Features • 3700 sq feet solar panels (60% electricity savings) • Living machine wastewater treatment system, powered by sunlight eliminating need for off-site water treatment; 80% recycled • Closed loop geothermal heating and cooling • Natural landscaping- ponds and wetlands for storm water and run-off • Green maintenance protocol post occupancy • Learning points: Less technical and complex systems would have been included; 100% fresh air ventilation is hard to manage

23. A.J Lewis Centre: Project Successes • Uses 33% electricity compared to other buildings on campus • Operating cost saving exceeded expectations • Enrolment has significantly increased and significant publicity for the College: Oberline college has become known for best environmental studies programme in the USA • Widespread media interest National Media- requires full time staff handling enquiries

24. Implications for UK HEis Well designed and implemented buildings can deliver: • Reduced whole life costs • Better functionality for users including those who have to maintain • Involving and understanding user requirements and experiences is central to Green Building Design – often neglected to a significant cost The Green Building movement is getting a critical mass • Especially in North America • Including many US universities

25. Implications for UK HEis Green Buildings are moving up the experience curve • Better understanding of what works, and doesn’t • Falling costs for key technologies Green building is inevitable • To respond to climate change and stricter regulation • To improve long term financial and market performance of HEis

26. The Way Forward • “The way forward to solve the environmental problem is by legislation, education and example” • Brian Edwards – RIBA Environment & Energy Committee

27. HEEPI: Town Hall, Leeds 01/12/05RICS - “Green Value” Report: contact • Jim Green MSc MRICS CES • RICS Presidential Comm on Sustainability • RICS Environment Faculty • Construction Industry Environ’l Forum • jim@baylight.co.uk • 020 7731 9674 • 07771 622217