Construction World June 2022

COMMENT

The MSCI South Africa Green Annual Property Index 2021 was released in April. This index has, for the past six years, provided an independent comparative return on investment for green

index sampled 303 prime and A-grade office properties with a combined value R59,1bn. Of these, 153 were green-certified buildings which were compared to 150 non-certified offices of a similar quality. The results indicate that the buildings reduce cost of occupancy for tentants and that these buildings provide a healthier environment for occupants. At the end of December 2021, the green-certified office sample delivered a return of 2,2%, 170 Building Performance Score more than the non-certified samples’ return of 0,5%. During the past six years, green certified offices outperformed the non certified sample by 19,1%. The main reason for the better performance of green certified offices is that they have a higher income return despite costing, on average, 29% more per square metre to build. Green certified offices have lower per square metre usage of electricity-and water when compared to non-certified offices. The increase in these costs can have a significant impact on performance over the lifecycle of a property.

landscape has not seen stellar results like this for a while: Afrimat, a leading open-pit mining company providing industrial minerals, bulk commodities and construction materials, recently released full year results for the year ended 28 February 2022, with revenue up 26,7% to R4,7bn (2021: R3,7bn). In the current cut-throat context, this is impressive.

certified and non certified offices.

Stay safe Wilhelm du Plessis Editor

I t illustrates that there is not only a link between green-certified buildings and investment performance, but also between certified buildings and lower vacancy rates, lower operating costs, higher net operating income and lower discount rates. The current instalment of the MSCI South Africa Green Annual Property Index supports how much business sense green buildings in the commercial property sector make. In fact, it shows that the investment performance of certified green, Prime, The Index is released annually by the Green Building Council of South Africa (GBCSA) and is sponsored by Growthpoint Properties. Towards the end of 2021, the and A-grade offices outperform buildings that are not certified.

Highlight of 2022 (so far) The South African construction

2021’s special Best Projects issue. Entries are now awaited.

EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & GRAPHIC ARTIST

PUBLISHER Karen Grant

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2 CONSTRUCTION WORLD JUNE 2022