Make green exciting – and watch cash grow on trees
Published: 13 January, 2012
UK: Britain is in danger of taking its eye off the sustainability ball because of the distractions of dealing with the daily pressures of UK economic turmoil – but green could still be the big cash generator of 2012, according to construction consultancy McBains Cooper.
“I think there is a very real risk that we will let short-term economic policy move us further behind Europe, and will prevent us from moving further up the global league table of nations driving innovation in sustainable initiatives,” said Mark Leeson, director of McBains Cooper.
“There is currently a vast UK estate of not-green-enough commercial property which could be a huge and sudden generator of cash for both the construction sector and building owners: it’s staring us in the face.
“Around three-quarters of today’s commercial property will still be in use by 2020 – and future-proofing them by driving efficiencies through green enhancements could yield 15% on investment values, and raise tenant income by 5%, while also benefitting from green tax incentives. There are also obvious advantages in terms of branding, perceived quality of building and benefits for occupants in terms of health and wellbeing.”
Campbell Devine of McBains Cooper said: “You don’t have to get the calculator out to work out the potential revenue increases and tax benefits by making even just a fraction of the UK’s commercial property more green.
“With the introduction of FITs (Feed-In Tariffs) and RHI (Renewable Heat Incentive) there is a business case for even the most demanding investors to embrace green initiatives when retrofitting buildings. Cash can grow from trees.
“The issue is perhaps the legacy of an over-complicated planning approval system, and a lack of a sense of clarity amongst commercial property owners: but things are changing fast, particularly with emphasis on carbon reduction rather than sustainable electricity generation.
“What we need is an injection of excitement into the green construction agenda: a penny-dropping moment when it hits investors that a green approach can move bank accounts out of the red and into the black. For impact, that injection needs to come out of the blue: a concisely-delivered ‘sustainability information bomb’ aimed at investors, and which highlights the brutal cash benefits of future-proofing property.
“‘Green enhancement’ and ‘better green credentials’ often improves tenant quality, occupancy levels, reduces sick leave and increases capital values and the sale-ability of any property. There’s also a growing club of investors who are snapping up older but well-let properties, and which have potential for rejuvenation and retro-fit, providing a contrast to risky new development caught by the potential impasse as the Government considers its position in relation to changes to the planning system.”