BREEAM value increases while costs reduce
‘Putting a price on sustainability’, a report published in 2005, calculated that the additional capital costs for an air-conditioned building in order to achieve a BREEAM Excellent rating could be as much as 7%.
However, the 2014 BRE/Sweett Group report ‘Delivering Sustainable Buildings, Savings and Payback’ put the capital cost uplift for scoring an Excellent rated an air-conditioned office at around 0.9% (in a location with ‘good’ public transport links).
From 7% to as little as 0.9% in a decade is testament to the extent that BREEAM has driven the green building agenda. This has been achieved through:
- Building economies of scale that support innovation diffusion and the consequential fall in technology cost.
- Streamlining and integrating environmentally-sound production management processes and techniques.
- Developing green building design and management skills capacities throughout the design and construction sector.
- Increasing acceptance of the need to deliver and manage a sustainable built environment across a variety of stakeholders such as clients, financial managers and policy makers.
While most decisions in the construction sector are based on capital or direct life cycle costs, the wider financial and corporate benefits of sustainable buildings, which can far outweigh these, are not always considered.
However, this could be changing.
In 2012, Schneider Electric, BSRIA and BRE interviewed BREEAM users to determine the perceived benefits of sustainable buildings. Only 43% saw operational or lifecycle cost savings to be a benefit, whilst 77% saw the major value in increased market recognition or industry standing.
Next on the list in terms of benefits, were improved occupant satisfaction, a reduction in construction waste and more efficient use of materials. Research by law firm DLA Piper found that, of EU property clients surveyed, 97% considered certification important in attracting higher profile tenants that are willing to invest more in BREEAM rated assets.
In addition, 2014 saw one of Europe’s largest commercial property companies, Unibail-Rodamco, issue a €750m bond based on a portfolio of green buildings. To be included in the portfolio, buildings had to achieve or exceed a BREEAM ‘Very Good’ New Construction rating and at least a BREEAM in-Use ‘Very Good’ rating (within 3 years of opening). The bond was 3.4 times oversubscribed in under 2 hours and the price paid for the bonds by investors is saving Unibail-Rodamco over €500,000 a year in interest payments.
Furthermore, AXA Invest Managers-Real Assets have a policy that 75% of their real estate assets undergo an environmental assessment by 2030. Not only will this reduce operating costs, it will improve the long term value of their assets (to the benefit of both investors and tenants) and cement AXA’s place as industry leaders in sustainability.
This article originally appeared in BRE Buzz, published on 3 March 2016.
--BRE Buzz
[edit] Related articles on Designing Buildings
- Building Research Establishment.
- BRE Trust.
- BREEAM.
- BREEAM and CEEQUAL.
- BREEAM and retail.
- BREEAM In-Use International.
- Closing the gap between design and as-built performance.
- Code for Sustainable Homes.
- Common Minimum Standards.
- Floor insulation.
- Government Construction Strategy.
- Iran - market potential for BREEAM.
- Leadership in Energy and Environmental Design.
- National Planning Policy Framework.
- NHBC technical standards.
- Passivhaus.
- Performance in use.
- Roof insulation.
- Ska rating.
- Sustainability.
- Whole-life costs.
Featured articles and news
RTPI leader to become new CIOB Chief Executive Officer
Dr Victoria Hills MRTPI, FICE to take over after Caroline Gumble’s departure.
Social and affordable housing, a long term plan for delivery
The “Delivering a Decade of Renewal for Social and Affordable Housing” strategy sets out future path.
A change to adoptive architecture
Effects of global weather warming on architectural detailing, material choice and human interaction.
The proposed publicly owned and backed subsidiary of Homes England, to facilitate new homes.
How big is the problem and what can we do to mitigate the effects?
Overheating guidance and tools for building designers
A number of cool guides to help with the heat.
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).