• A total of 35% global energy consumption and 38% global carbon dioxide emissions are related to building and construction. (United Nations Environment Programme, 2020)
• South Africa needs to meet its net-zero emission target by 2050 and set more ambitious nearer-term emissions targets to play an equitable role in limiting global temperature increases to well below 2°C, and preferably to below 1.5°C – as per the Paris Agreement’s targets.
• Accounting for ~15% of the country’s GHG inventory, buildings are a key part of South Africa’s decarbonisation strategy; building emissions will need to decrease by 34% in relation to the International Energy Agency’s Reference Technology Scenario by 2050 (or by 82% below current emissions) if South Africa is to align itself to a 2°C scenario – i.e. most buildings will need to be at or near to net-zero carbon.
• In most instances, improved energy efficiency (EE) reduces building operational expenditure and thus comes with strong economic arguments. However, the need to improve EE is increasingly being led by the net-zero imperative, this is especially relevant in South Africa where grid electricity is highly carbon intensive.
• The Post-2015 National Energy Efficiency Strategy (NEES), also requires that state-owned buildings reduce specific energy consumption by 50%, and commercial buildings by 37%, by 2030, off 2015 benchmarks.
The Existing Building Performance (EBP) tool focuses on the operational phase of a building lifecycle, realising that energy efficiency and sustainability is about the journey to better performance. The tool rewards energy and water monitoring initiatives as well as the adoption of sustainability focused management policies. The GBCSA released the green lease toolkit in partnership with the South African Property Association. It provides methodologies for negotiating the shared benefit and responsibility of green buildings between tenants and landlords.
MEASURE TO MANAGE
A major component (40%) of the EBP certification is energy and water benchmarking. Project teams seeking certification must make use of the Energy Water Performance (EWP) tool. Developed by the GBCSA in 2011 and sponsored by Growthpoint Property, this free tool can only be used for office buildings. Other ways to measure energy and water compliance paths are available within the EBP tool for other building types. The tool is normalised for factors such as occupancy rate, equipment and climate and allows property or portfolio owners to compare their office building performance in relation to a benchmark, giving each building a score on a sliding scale of 1 to 10. A building owner can peruse certification with EWP, potentially as a precursor to an EBP certification; this solicits a cost from the GBCSA.
In many cases, the EWP score provides the necessary benchmarking to motivate for retrofitting a building or change building management practices. The data compiled for the EWP benchmarking process will point to opportunities to improve the water performance of a building through rainwater harvesting and installing recycling measures. The EWP water score informs the future-proofing strategy for a building recognising that water security will face significant pressure in the imminent years.
“When the original EBP tool was developed, it endeavoured to take as many building typologies as possible into account, but there were nonetheless limitations and, in reality, it has largely been applied to the commercial office segment of the market,” explains GBCSA head of technical, Georgina Smit.
A customisation process was adopted so that GBCSA can offer the market standardised guidelines for energy and water benchmarking of industrial buildings, as this currently does not exist in the South African property market. Furthermore, nuances around industrial building ownership needed to be slightly reconsidered within the tool to better serve the market.
For example, many single tenancies operate on triple net leases which places a lot of the operational decision-making with the tenant and not the landlord. “A custom tool is not a new one, but instead focuses on customising the existing tool for a new typology, to better suit the functionality and user profile of that typology,” explains Smit.
EWP TO EBP TO ESG
With a portfolio of assets in South Africa spanning all three traditional property sectors (office, industrial and retail), Growthpoint notes that the EWP that is integrated into the EBP tool facilitates bottom-up learnings on efficiency and costs as well as top-down learnings for sustainability and accessing financial products.
Grahame Cruickshanks, head of sustainability and utilities at Growthpoint Properties, explains that improving the efficiency of buildings, especially their energy consumption, is one of the easiest and most cost-effective ways to reduce carbon emissions, adding that “green-rating tools such as the Green Star EBP are proven to have a direct impact on increasing the number of green buildings and delivering positive environmental impacts for the country.”
In response to the need to drive energy efficiency in existing buildings the GBCSA developed its Existing Building Performance (EBP) tool. This performance rating encourages:
• Optimised performance in areas under the landlord’s influence – the rating expires after three years and building owners need to recertify.
• Setting up a win/win situation between tenants and property owners that drives further efficiencies within tenancies.
Growthpoint currently has 132 EBP-certified buildings in its portfolio (including some of which are recertifications and apart from its certifications for new buildings) and is targeting more.
Mareli Cloete, senior manager for SHE (safety, health and environment) and sustainability at Cape Town’s V&A Waterfront, highlights that the Waterfront has publicly committed to becoming a carbon-neutral precinct by 2035. She says, “The only way that you can do this with existing buildings is to measure their operational efficiency, plan accordingly and set targets and objectives.” The EBP tool facilitates this process.
The V&A precinct has six EBP-rated buildings and another five pending. That is in addition to 11 new building Green Star certifications.
In a progressive contribution to transformation of the commercial green building space in September 2021,
JSE-listed South African real estate investment trust (REIT), Redefine Properties, certified/recertified another 40 buildings in their property portfolio under the EBP rating tool. These accolades included 16 office EBP recertifications and 24 new EBP certifications across Gauteng, Cape Town, KwaZulu-Natal and Polokwane. This is the largest bulk Green Star EBP certification from any one commercial property owner to date and represents a major milestone for green property in South Africa.
Redefine’s diversified property portfolio (amounting to R75.3-billion) includes a mix of retail, office and industrial space throughout South Africa, and retail and logistics property investments in Poland. It currently has 131 Green Star EBP ratings in its portfolio (some of which are recertifications). Of these, 18 achieved 5-Star Green Star certifications and seven achieved a 6-Star Green Star accolade. The 6-Star Green Star certificates include Collingwood (initial certification/recertification), Gatehouse (initial certification/recertification), Old Warehouse (initial certification/recertification) and Central Building.
“Property owners, such as Redefine, stimulate market transformation by pioneering and leading when they ‘walk the talk’ and commit significantly to certification,” says Smit. “EBP certifications extend far beyond just energy and water performance management to encompass a much broader and holistic approach to sustainability management at an operational level. As such, they represent a commitment to a wide range of sustainability issues by a property owner and manager.”
Head of ESG at Redefine, Anelisa Keke, elaborates: “The benefits of green buildings run deeper and wider than what’s obvious at first glance. Besides the water and energy efficiencies, reduction of emissions and waste that come through sustainable design, construction and operations at Redefine the certification is a testament to our drive to create, manage and invest in spaces in a manner that changes lives.” She says that Redefine is focusing on being net zero by 2030.
Investec Property Fund (IPF) has 25 EBP certifications, two of which are recertifications. Jutta Berns, director and principal at Ecocentric, is responsible for IPF’s certification processes. She is excited that, apart from office buildings being done, IPF also has five industrial EBPs in progress as part of the Green Star EBP Custom Industrial Tool, currently in pilot phase.
The Watershed is a mixed-use building that achieved a 6-Star Green Star EBP rating in 2019. It opened in its current form in 2015. Much of its existing structure and finishes were retained as fewer new materials mean less embodied energy. This included keeping the original timber warehouse floor, refurbishing extant windows and suspending the new first floor from the original gantry structure. The space maximises natural daylight, reducing dependency on artificial light while also minimising heat gain. It is mostly naturally ventilated, minimising the requirements for mechanical circulation while maintaining excellent indoor air quality. A solar energy roof installation reduces power usage to below 50% when compared to similar building typologies.
All stores housed in the building are SMMEs that supply local products. Easy access to public transport (MyCiti buses) and cycling lanes means that almost all building staff use transport methods other than single occupancy cars.
Victoria Wharf shopping centre achieved a 4-Star Green Star EBP rating in 2015 and upgraded to a 5-Star rating in 2019. Areas of improvement that aided the extra star included on-site waste management and recycling initiatives, extensive use of skylights and LED technology, the inclusion of water-efficiency measures, curtailing motor transportation, preference for materials with low-environmental impact and without toxic emissions as well as actively driving the elimination of single-use plastics.
Cloete highlights that tenant participation is vital in the EBP process because the focus is mostly on operational targets. “With an average tenant vacancy rate of only 1%, it became imperative to introduce a green vision that would be inclusive of tenants. Our Green Lease Toolkit offers incentives to tenants who commit to recycling.” By 2019, almost a quarter of its 450 retail tenants and 80 eateries had signed up to the programme.
INVESTEC PROPERTY FUND
2929 on Nicol was IPF’s first property to receive an EBP certification in 2018. It was re-rated in 2021 with a 5-Star Green Star certification. “Achieving a 5-Star Green Star rating as part of the recertification speaks to the maturity of the implementation of the tool at the property, which made recertification fairly straightforward, with particular effort on behalf of the property team to improve the energy and water performance,” says Berns.
345 Rivonia Road achieved a 5-Star Green Star EBP rating in May 2022. Berns explains that the building design allows for ample natural lighting while still minimising glare and thermal gains, making it a very comfortable internal space. She adds, “Energy and water performance played the most significant role in achieving the coveted 5-Star Green Star rating, where the building scored 60% of the possible energy performance points and 71% of the possible water performance points.”
The Alice Lane development was the first Green Star rated precinct in the area, achieving a 4-Star Green Star As-Built and its first office design certification in 2003 (4-Star Green Star) and all three buildings have subsequently received 4-Star Green Star Office Design or As-Built ratings.
The EBP rating is a 4-Star Green Star rating. It performs particularly well when it comes to on-site facilities
and services, public transport access and pedestrian friendliness, reducing the carbon footprint of transportation of its users.
Black River Office Park in Observatory, Cape Town, is a district of 13 buildings. All eight office buildings are Green Star rated, making this one of the greenest office precincts in South Africa. Three of the buildings have 6-Star Green Star EBP ratings, one a 5-Star Green Star EBP rating and one a 3-Star Green Star EBP rating.
River Park achieved a 5-Star Green Star rating in March 2022. To achieve this rating, the energy and water consumption was reduced, indoor air quality was monitored and mixed-mode ventilation (natural and mechanical) was implemented. LED lighting was installed and glare control devices were introduced in occupied spaces. Apart from the physical interventions, green lease criteria and operational guidelines were introduced.
As EBP measures operational statistics, it is important to spell out the requirements for building use. In this case, these included a building users’ guide, cleaning policy, travel plan, green procurement and purchasing policies, as well as management plans for landscaping and operational waste.
Cruikshanks is clear that, apart from the environmental imperatives, there are economic advantages to building owners, particularly those with large portfolios. The main benefits for property investors include improved total return on investment on Green Star rated properties, improved let ability (some tenants now regard a Green Star rating as a prerequisite), investor attractiveness (institutional investors require ESG criteria in place and certifying Green Buildings confirms their performance in terms of ESG), and access to green finance opportunities (like green and sustainability-linked bonds).
He further explains that by mostly targeting improved water and energy efficiency, EBP ratings become relatively simple to achieve but also that these efficiencies typically also offer attractive returns on investment. So, upgrading existing buildings’ performance just makes environmental and economic sense.