Real estate risk analysts, the Investment Property Databank (IPD), in conjunction with the Green Building Council of South Africa (GBCSA), announced, on Wednesday, the impending launch of the IPD Sustainable Property Index for South Africa, which will aim to determine how the inclusion of sustainable, or green buildings, in property portfolios reflected in property fundamentals and investment returns.
Describing the inclusion of green buildings in portfolios as a “no brainer”, IPD South Africa head Stan Garrun said that, while the GBCSA had demonstrated a good understanding of the green building market and the lower environmental impact of green buildings, a sustainable mechanism through which the added investment value of such buildings could be measured was lacking.
“It’s a big deal, as green buildings are becoming mainstream,” GBCSA Brian Wilkinson added at the twelfth IPD South Africa Property Investment Conference, in Johannesburg.
“In South Africa, we already have 1.2-million square metres of GBCSA-approved green building space and 800 000 m2 of building space currently registered for certification.”
He added that the council had always understood the need to track the “green value proposition”, which would now be achieved through the index.
It would also enable the differentiation of property portfolios within the property market, demonstrating the impact that investment in green buildings had on vacancies, returns and other property market fundamentals.
“[We believe that] owners of capital will start using responsible investment guides – such as this index – to inform investment decisions. Property funds that are doing the right thing in terms of green investment will thus trade at a premium,” Wilkinson asserted.
He told Engineering News Online on the sidelines of the conference that the IPD had already started collecting data for the index from its South African members, and expected to release a report on the results within a year.