Government regulators should consider sweetening the pot for those using green technology that limit the impact of improvement to the environment, according property development experts advocating green technology in the Philippines.
For one, incentives could be considered by the government in order to lower the cost of green equipment and encourage players to embrace these technologies, according to urban planner Felino A. Palafox, Jr., president of the Management of the Philippines (MAP).
Adopting green technologies add up about 10 percent to total costs when only using conventional designs and technology, Palafox said.
“They could do something that could lessen the cost of buying these equipment,” he said.
Palafox also noted that in countries like Singapore and Dubai, green practitioners are actually given cash incentives for developing green structures.
The advocacy for green living had been long in the Philippines, but is taking a long time to take root.
Based on the experience of the latest green building in Makati, Zuellig building along Paseo de Roxas, its developers are hoping that the office building will attract attention once it is fully completed. At present, the project is just 20 percent leased out, according to Joannie Mitchell, director of CB Richard Ellis which is marketing Zuellig.
Upon completion, Mitchell assumes that another year will be needed to fully lease the property.
With 62,0000 square meters of total leasable area —- of which 59,900 sq. m. is prime-grade office space and 2,900 sq. m. is for retail pavilion, —- the 33-storey Zuellig building is GOLD standard certified by certifying organization Leadership in Energy and Environment Design (LEED) and is being positioned for businesses seeking an office in the business district of Manila.
Developer pharmaceutical giant Zuellig is spending P7 billion for the development project which is eyed for completion by the first quarter of 2012.
Chickie Locsin, marketing and communications manager for Zuelling unit Bridgebury Realty Corp., said take-up of the Zuellig development is relatively slow with interested locators surprised by the rent premium of the building compared to the typical asking rate of prime office spaces in the Makati central business district.
Palafox said that MAP is leading the initiative to push for the grant of incentives.
“For MAP, we have created a committee on environment which will be tasked to work on the recommendations. It has to be properly studied,” said Palafox.
Local green building certification Philippine Green Building Council meanwhile also advocates the grant of potential incentives which green building adopters will be asking from the government, according to Christopher dela Cruz, chairman of PhilGBC.
While the list remains under study, Dela Cruz said it is designed to encourage more green buildings in the Philippines.
Miguel C. Guerrero III of the United Architects of the Philippinessaid while adoption is quite slow, the current push in green technologies is more pronounced at present than in the past.
“It has slowly filtered in,” Guerrero said, noting that one factor influencing the jump to green technology in the Philippines is the desire to save on costs in housing spending.
“While developers are not yet that active in developing environment-friendly buildings, they are encouraged to look at it because of end-users’ desire to save on cost of maintaining a house. The bottomline is cost,” said Guerrero.
Ramon Fernando Rufino, vice president at property developer The Net Group, said that it will only be a matter of time before the property market appreciates the trade-off between paying a rent premium in a green building and the benefit of living in such development like Zuellig’s.
The Net Group, which is a member of PhilGBC, is also having its own project using the locally-developed green building standard Building Ecologically Responsive Design Excellence (BERDE). BERDE, which is supported by big developers like Ayala Land, Inc. (Ayala Land) and Megaworld Corp. (Megaworld), is a standard which claims to be more attuned to Philippine settings.
As an adapter of the standard, The Net Group has piloted the standard on its project Net Lima which will rise in the business district of the fast growing Bonifacio Global City.
In Net Lima, The Net Group has incorporated designs like sun shading and a full glass curtain wall, which reduces energy use particularly on air-conditioning; fiberglass fuel storage tanks with built-in leak detection for generators used during power outages, which compared to industry standard steel tanks, reduce the risk of leaks and contamination and also have a life span twice as long as its steel counterpart and can easily be repaired and serviced.
CB Richard Ellis noted that the desire to be “green,” or to be perceived as such, is increasingly motivating the behavior of some companies to transfer in a more environment-friendly building.
It is a question of how to convince investors and developers that “adopting green practices” in property development actually makes “good commercial sense,” CB Richard Ellis added.
“Specifically, developers who incur the additional cost of developing green buildings need to be rewarded for doing so,” CB Richard Ellis said, adding that achieving the “more basic” levels of certification may raise costs by 2 to 3 percent for new constructions, while a “greener” building —- designed to achieve one of the higher standards —- is likely to add between 5 percent to 7.5 percent to construction cost.
Developing a “zero-carbon building” meanwhile, which is a “more onerous environmental standard than even the higher levels of BREEAM and LEAD accreditation,” the premium rises up to around 12.5 percent, CB Richard Ellis said.
Investors then will look for higher yield from their investments which should come in the form of rent premium, lower interest in the financial market, or lower premium for insurance applications for a green building, since it is “increasingly seen as ‘future-proofed’ investments,” the property consultant said.
