Retrofitting commercial buildings in Singapore can boost their value. With expected savings of up to 10 percent on operating expenses, commercial buildings can yield a two percent increase in capital value, according to a joint study by the Building and Construction Authority (BCA) and the Department of Real Estate (DRE) at the National University of Singapore (NUS).
“There is now greater awareness in the industry that the upfront cost of retrofitting energy inefficient buildings can be recovered in about four to seven years,” said Quek See Tiat, Chairman of the BCA. “However, many do not realise that another potential economic benefit is the potential enhancement in the property value for green and energy efficient buildings.”
The study was conducted with six top real estate consultancy firms — Colliers International, Chesterton Suntec, CB Richard Ellis, DTZ Tie Leung, Knight Frank and Jones Lang LaSalle — in February 2011 and aimed to evaluate whether Green Mark-rated commercial buildings have an impact on commercial property valuation.
About 23 commercial properties spanning hotel, retail, office and mixed-use projects were used as samples in the study. Key factors considered included the properties’ location, age, tenure, Gross Floor Area (GFA), Net Lettable Area (NLA), energy consumption figures (before and after retrofitting), the BCA Green Mark award rating and year awarded and the capital expenditure for the retrofit project.
In addition to the key findings, the study also found that retrofitting to achieve the standard BCA Green Mark certification can result in a significant reduction in energy consumption. This means that the average savings from the buildings after retrofitting was approximately 17 percent of the building’s total energy consumption, compared to the period before retrofitting.
Also, the DRE in NUS, in collaboration with BCA and representatives from the six real estate consultancy firms, are developing valuation guidelines for green commercial properties that will take into account the cost and benefit of newly developed and retrofitted green commercial properties.
Meanwhile, eight leading developers and building owners signed the Green Pledge at the Breakfast Talk for CEOs to show their commitment to attaining higher energy efficiency with their existing buildings through the BCA Green Mark certification by 2020. The eight developers include Ascendas Land (Singapore), Allgreen Properties Ltd, City Developments Ltd, CapitaLand Ltd, Furama Hotels International, Frasers Centrepoint Limited, Lend Lease and Keppel Land Ltd.
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