Green buildings dollar-smart 

Source: ONE NewsGreen Building at Dockside Green, British Columbia

Green building advocates argue it is the only sector where emissions reductions are likely to save rather than cost money, as well as providing a potential boon for investors.

New Zealand's buildings account for 17% of the country's greenhouse gas emissions, the third-largest emissions category nationally.

Canadian property developer Joe van Bellegham, a keynote speaker at the recent Green Building Summit in Auckland, says the green building movement in North America is exploding as investors realise the economic case for green building.

Van Bellegham is the development manager for Dockside Green, a $NZ620-million green building and sustainable community development in British Columbia.

"We treat our own sewage on-site and use the treated water for flushing toilets and irrigation. We have a renewable energy system on-site so we take waste wood from our community and gasify it so that provides all the heating and domestic hot water for the development," he says.

AMP Capital research analyst Nick Edgerton says returns for green property include higher rental premiums. In the United States, returns are up to 9% higher than regular property and in Australia are between 1.5-2% higher.

More than 95% of New Zealand's city office buildings are more than 10 years old with an average age of 31 years. For these reasons the Green building Council - a not-for-profit organisation promoting and certifying green buildings - has expanded its green-star programme to allow existing buildings to gain accreditation.

"We have an amazing opportunity to create incentives, develop green star tools, to actually give developers and investors who own these buildings the right kind of framework to understand what they can do and to see what the economic opportunity is for them," says Green Building Council CEO Jane Henley.

Kiwi Income Property Trust is one of two listed commercial property companies taking part in a test-run of the new green standards for existing buildings.

Spokesperson Jason Happy says the company has been making some subtle changes to its properties and has plans for more.

"With the lighting we're reducing the energy profile for the building and then we've some external things going on where we're trying to reduce the profile of the building in terms of its waste," he says.

While the company hopes these and other changes will make it more attractive to tenants and to investors, it is also hoping for other benefits.

Happy says self-assessed productivity of workers in green buildings is 5-10% higher than those in non-green buildings.

"That's clearly going to be a much greater multiple than the energy cost-savings that would accrue".