Retrofitting commercial buildings can lead to an increase in their property value, said a joint study by the Building and Construction Authority (BCA) and the Department of Real Estate at the National University of Singapore (NUS).
Six real estate consultancy firms also collaborated in the study.
Retrofitting results in an average 10 per cent savings in operating costs and an increase of about 2 per cent in capital value.
Retrofitting to achieve the standard BCA Green Mark certification can result in a significant reduction in energy consumption.
The average savings from the buildings sampled after retrofitting is about 17 per cent of the total building’s energy consumption compared to before retrofitting.
If measured by the area of the buildings where the owners are responsible for paying for the utilities, the average savings is even higher at nearly 30 per cent.
The study said the effort to achieve Green Mark certification need not be costly.
If the retrofit cost is expressed as a percentage of the current market value of property, it is 0.5 per cent for retail and 1 per cent for offices.
There is also no significant disruption to both owners and users.
As a next step, the Department of Real Estate in NUS is developing a valuation guideline for green commercial properties that will take into account the cost and benefit of newly developed and retrofitted green commercial properties.
This will be done in collaboration with representatives from the six real estate consultancy firms and BCA.
BCA will also work with the Singapore Institute of Surveyors and Valuers (SISV) to incorporate guidelines on green building valuation.
“There is now greater awareness in the industry that the upfront cost of retrofitting energy inefficient buildings can be recovered in about four to seven years,” said Mr Quek See Tiat, chairman of BCA, at the Breakfast Talk for CEOs on the last day of the 2011 International Green Building Conference on Friday.
“However, many do not realise that another potential economic benefit is the potential enhancement in the property value for green and energy efficient buildings,” he added.
Source : Channel NewsAsia – 16 Sep 2011