News: RP realtors join foreigners in LEED bid

[Submitted to BusinessMirror newspaper September 05, 2010. Photo by:
Dennis Estopace of Greenbelt 5, Makati City.]

PHILIPPINE businesses have joined the band-wagon in getting certified
by the United States' Leadership in Energy & Environmental Design
standard for new and existing buildings, according a LEED consultant.
Dean Barone, president of Barone International Inc., cited the
buildings vying for LEED certification include that of Zuellig Pharma
Corp.'s in Makati City; Aegis People Support in Cebu; and, Ayala Land
Inc.'s Nuvali Evotech One in Laguna. Likewise, three buildings in
Taguig City – Fort Bonifacio Development Corp.'s The Mind Museum,
Megaworld Corp.'s One Campus Place, and Sun Life Center– are also
seeking certification.
Others that submitted LEED certification checklist to the US Green
Building Council include the Asian Development Bank for their
headquarters in Manila, SM Development Corp. for its Aria building
project, the Centennial Hotel in Baguio City, the Arya Residential
Towers in Taguig, for its Shangri-la at the Fort also in Taguig, and
Makati Place in Makati.
According to Barone, a 100,000-square feet (sf) LEED building saves
US$1.50/sf in energy costs or US$150,000 annually in savings.
He said that an owner who invested US$400,000 in green technology and
standards to get the US$1.50/sf energy savings gets a US$4/sf premium.
The payback of investment is approximately 29 months, he said.
"Commercial real estate properties are valued as a multiple of 'net
operating income', or dividing the income by the capitalization rate
by roughly six percent. If the building reduced its annual energy
costs by US$150,000, the capitalized rate of 6% would result in an
incremental increase of property value by US$2.5 million," Barone said
in his presentation Thursday.
He added that the result of investing US$400,000 in annual savings of
US$150,000 would be to yield a return on investment of 625 percent.
"With a 6-percent annual capitalization rate, the green investments
add US$2.5 million to the value of the building (US$150,000 savings
divided by 6% rate) or an increase of US$25 per sf with an investment
of US$4/sf. This is equivalent to a net increase value of US$21sf,"
Barone claims.
He added that the value of the LEED project when completed would
increase from US$27.5 million to US$30 million.
"If the building owner or developer decided to sell their LEED
building, it is the norm for green buildings to command 30% premium
price over similar non-LEED buildings."
Already LEED-certified are the Texas Instruments' building in Clark,
Pampanga (gold) and the shared services building of Shell Shared
Services (Asia) B.V. in Makati City (silver).
The USGBC has four levels of LEED certification. A basic LEED
certification garners 40+ points, silver 50+, gold 60+, and platinum
80-100 points.
These points are given to buildings after scoring in key categories:
site sustainability (26-30 points possible); water efficiency (10-11
points possible); energy and atmosphere (35-37 points possible);
materials and resources used (14 points possible); quality of indoor
environment (15-16 points possible); and, innovation and design
process (6 points possible).
There are prerequisites, though, Barone said citing these as reducing
water use and energy consumption by 20 percent each, including
commissioning services for building systems, eliminating the use of
all CFC refrigerants, establishing a recycling program, and improving
the indoor air quality. Likewise, the building must ban cigarette
smoking in the area.
Citing USGBC data, Barone said green buildings are healthy because
"occupants are healthier and more productive."
"In the US, people spend, on average, 90% or more of their time
indoors. So since green buildings typically have better indoor air
quality and lighting, these, on average, save US$58 billion of sick
time from work annually and add US$180 billion in increased worker
productivity annually."
Barone said that existing buildings can be applied for certification.
Likewise, the USGBC, he said is piloting a certification of
neighborhood and communities.