In response to the situation, the Property Unit Trusts (PUTs) have started to explore the potential to move to green buildings, both for new developments and when refurbishing existing buildings, states Craig Hallowes, spokesperson for the Association of Property Unit Trusts (APUT).

Buildings are responsible for 40% or more of greenhouse gas emissions in the developed world and we have a responsibility to ensure that the built environment does not further contribute to a turnaround in global warming, he adds.

In looking to create green buildings, the key metrics are: energy, land, water and waste. A green building is defined as one which is energy- and resource-efficient and environmentally friendly. It should consume less than half the energy than a conventional building, with similar reductions in potable water usage, runoff to sewer, and solid waste disposal. In addition, the development should endorse nature conservation principles.

Roger Perkin, MD of SA Corporate Real Estate Fund (SA Corp), agrees. As a member of the Old Mutual Investment Group Property Investments, we subscribe to the key design guidelines developed by the Old Mutual. These include the optimisation of space and material usage, the efficient use of energy as well as using renewable energy as well as facilities for recycling waste, from gray water to paper and other recyclables.

Environmental protection is enshrined in South Africas progressive Constitution which states that Everyone has the right to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that  secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.

While the initial cost of developing a green building may run at 3% to 5% above conventional building costs in a five-star building and require additional design considerations, this is more than compensated for by a reduction in operating costs.

• For a five-star building the savings in running costs are of the order of:
                                      
                               Saving    
    
   Electricity                  60%      
   Water                       30%      
   Greenhouse gases      30%      
   Carbon emissions       35%      
   Energy                      30%      
   Waste                      50%-90%   
                                     

For building owners, these savings will translate into cost as well as higher tenant demand and premium rents, notes Hallowes. Green buildings are beneficial for tenants. The workspace is less susceptible to sick building syndrome and there is better staff retention. With better space usage, a by-product is higher productivity.

Although is cannot be quantified at this stage, green buildings are expected to have a longer life span than conventional ones. As one of the Old Mutual guidelines notes, the design requires durability: To spread the environmental impacts of building over as long a period as possible, the structure must be durable. A building with a durable style (timeless architecture) will be more likely to realise a long life.

As the PUTs incorporate the green philosophy into their existing buildings and new developments, PUT unitholders are likely to see the rewards in improved valuations.