Viability of Green office buildings in New Zealand:

Building developers perspective

------By Daisy Supervisor: Dr. Eziaku Rasheed

Why investigating the viability of Green Office Building?

Buildings are the largest energy consumers worldwide. There is an urgent need to investigate how to reduce the energy consumption of buildings. Therefore, green buildings are been introduced to the construction industry.

Example:

By the end of 2012, there were total 742 new buildings certified as green buildings in China, and the total building area had reached to 75.43 million square meters (Yuming Liu et al, 2014).

Why investigating building developers?

Key professionals involved in green building developments

No previous research has focused on building developers

Fill the gaps

Research objectives

Examine the benefits of developing green office buildings

Assess the potential risks of developing green office buildings

Assess the market demands of green office buildings

Research method Interviews 1 to 2 Building developers per company

Sample framing 20 commercial construction companies in Auckland, and outside Auckland

Interview questions

How many green buildings you have managed?A brief summary of one green building that you have managed.What are the difficulties you had to deal with when managing this project?What are the selling points of this building? Was this building under 5 million dollars or above?Did you make good profit from this building? Profit range? For how long was the building been put in the market before it was sold?Do you think green building sells faster than other buildings? Do you think green building sells for higher price than other buildings?Would you like to manage more green buildings in the future?

Initial survey response

Auckland Region 13 out of 15 effective

responses Good survey method More construction

companies More Green Office Buildings

Outside Auckland 2 out of 5 effective

responses Ineffective survey method,

change the survey number from 10 companies to 5

Less construction companies

Less Green Office Buildings

Results and discussion

46.70%

33.30%

20.00%

The number of green buildings developer has

managed

0 to 1 2 to 3 Above 3

All percentages are based on a total number of 15 responses

Most building developers have managed one green building

33.30% of participants have managed 2 to 3 green buildings

20% of participants had more experience in green building management

Energy efficiency Occupant health Reduce pollution Creation of green job

Other0

2

4

6

8

10

12

14

16

Selling points of green office buildings

parti

cipa

nts

All participants think green office buildings are energy efficient

Green office buildings can reduce pollution

Green office buildings have healthy indoor environment for building occupants

Green buildings can create jobs

Building cost Legal liability Performance Lack of experience Regulatory0

2

4

6

8

10

12

14

16

Risks of green building development

parti

cipa

nts

The most significant risk is high building cost

Another risk that developers are concerned about is the performance of the green office building

Construction professional/builder who lack experience

The government’s regulatory and legal liability

Most green office buildings cost more than $5 million dollars. Less than 30% of green building developers managed green buildings at a cost lower than $5 million

Participants think the profit range of green office building is much higher than non-green buildings

Costs more, earns more!

9%

60%

24%

7%

Selling period of green building

1 year above 0.5 to 1 year Less than 0.5 year Other

Selling period for a building reflects how the building is accessible on the market.

Less than 10% of green office buildings were sold out in 13 to 15 months

24% of green office building had selling period of less than 0.5 year

Most buildings can be sold out between 0.5 to 1 year in Auckland

Best-selling green buildings were in good locations!

Most building developers agree green office buildings are viable in New Zealand Unique selling points A good profit Selling fast in the real estate market

But, developers must bear risks

High building cost

Inexperienced construction professionals/workers

Government’s policy

How to lower the risks

Hiring experienced building professionals and construction workers

The government should improve policies governing Green buildings.

In summary…..