Green economics
While we can sit back and talk about the virtues of a green building, its sustainable features and the positive effect it has on the environment, the concept will not catch on, least be implemented unless it can be proven that it makes business sense to opt for one. For, a property builder builds a structure with only one objective, that of making profits. An investor in real estate has a similar objective — attractive returns on investment.
Thus, cost of construction as well as maintenance of a green building plays a crucial role in determining the level of compliance. It needs to be understood that using locally available materials and renewable resources can reduce capital costs. Long-term cost savings too accrue from sustainable methods implemented in such buildings.
Typically, there are myths surrounding the concept of a green building. For successful implementation of the green concept, such myths need to be dispelled and replaced with facts.
To begin with, it is widely believed that green buildings are far costlier than conventional buildings. While it is true that the initial cost of construction is higher, the operational cost of a green building is much lower, bringing down maintenance expenditure over the years. This adds as significant savings over the years and when factored in, can show the cost of a green building to be lower than a conventional one.
Go green
In its report “Go Green” which talks about sustainable development in real estate, Colliers International shows one of its case studies. Wipro Technologies India is said to have achieved a 46 per cent saving in energy consumed, thus recovering the extra cost of six per cent incurred in their green construction, in a matter of 18 months.
The report also cites studies that show the average construction cost premium of a green building over that of a conventional building to be less than two per cent. Compared to this the savings in annual operational cost of energy is pegged at 30-40 per cent. Add to this the reduction in carbon emissions resulting from sustainable methods of construction and the improvement of our ecological footprint and there is a win-win situation.
Again, contrary to the widely prevailing belief that green buildings cannot fetch rentals and capital gains in similar bandwidth as conventional buildings, a study in California showed that builders received higher rentals and capital gains because of the lower operational cost and higher productivity of employees working in a green building.
Another widely prevailing myth is that green buildings compromise on comfort and design elements.
NANDHINI SUNDAR
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