A new collaboration between the Green Building Council South Africa and Investment Property Databank will analyse the fundamental investment benefits of efficiently managed buildings. The launch of the South Africa Sustainability Index was announced today at the 12th annual IPD South Africa Property Investment Conference in Sandton. This GBCSA and IPD collaboration will examine the relationship between property investment and a building’s environmental performance by measuring existing properties in South Africa in terms of their sustainability. 

A small pilot study undertaken by the team has already shown efficient commercial buildings provide higher returns to their owners.  It also reveals that these higher returns are driven by lower discount rates, or lower risk, potentially due to better fundamentals in efficient properties, such as vacancies and rental growth driving net income growth. The findings of this pilot study are also confirmed by similar research in other countries, such as Australia.

Taking their research to the next level, GBCSA and IPD have confirmed they will now grow their research sample to better provide the case for green building and efficient building management as an enhancer of returns. The research will start with average use trends by different types of commercial properties. As the research sample grows, it will also compare usage trends over time.  The research will be based on environmental resource usage data submitted by local property companies. The performance of efficient buildings will be measured against IPD data which represents a large portion of the South African commercial property sector.

The IPD South African Sustainability Index in conjunction with the GBCSA will be released annually and include in-depth analysis. Brian Wilkinson, CEO of the GBCSA, comments: “Green leadership is having a huge impact on commercial property in South Africa. Besides the proven benefits for users of green buildings, we wanted to show the impact of green building and efficient building management on the financial performance of a building to further support the case for green innovation in the South African property sector. We believe this new index will achieve this and become an important tool to drive even more sustainable and efficient buildings in the country.”

Stan Garrun, Executive Director and Head of IPD South Africa, comments: “This index is set to become a valuable source of information for capital owners to assess the environmental sustainability of property investments. IPD will assist in developing sustainability indicators and trends while enabling the ongoing analysis of the relationship between investment and environmental performance.”

A more detailed analysis of the pilot study findings will be made available at the 7th Annual GBCSA Convention, which takes place from 10 to 12 September at the Cape Town International Convention Centre.