Green Building Accelerates Globally Through Economic Downturn

Around the world, the green building marketplace is accelerating, according to a new study being released by McGraw-Hill Construction in partnership with United Technologies at the Greenbuild International Conference and Expo in San Francisco, Calif.

The study indicates a shift in the global construction market, now viewing green as a business opportunity rather than a niche market. Overwhelmingly, firms report that their top reasons to do green work are client demand and market demand—two key business drivers of strategic planning. The next top reasons were also oriented toward the corporate bottom line—lower operating costs and branding advantage. In contrast, the top reason in 2008 motivating the green building market was doing the right thing and market transformation, followed by client and market demand.

In the next three years, the sectors with the largest opportunity for green building around the world include new construction and renovation projects. Sixty three percent of firms have green work planned in new commercial projects and 45% in new institutional projects by 2015, and 50% have plans for green renovation work. In the United Kingdom and Singapore, green renovation projects were planned by the greatest number of firms at 65 and 69% respectively. In Brazil and UAE, new projects pose the largest opportunity. In Brazil, 83% of firms are planning to work on new green commercial projects over the next three years, and in the UAE, 73% have new green institutional projects planned.

Green buildings are also expected to garner business benefits for building owners. For new green building projects, firms report median operating cost savings of 8% over one year and 15% over five years, as well as increased building values of 7% (according to design and construction firms) and higher asset valuation of 5% (according to building owners).

For green retrofits, operating savings are higher than for new buildings with operating costs reported to decrease by 9% over one year and 13% over five years. Asset valuation is also expected to increase, though at more moderate levels than for new green buildings—design and construction professionals expect 5% increased building value from green retrofits, and owners expect higher asset valuation of 4%. For green projects, payback on efforts is expected within 8 years for new projects and 7 years for retrofit/renovation work.

Other significant findings include:

• Human factor benefits are driving green building more today compared to three years ago.
• Energy use reduction tops the environmental reasons for green building.
• Water use reduction is more important today.
• Improved indoor air quality is also more important today.
• For firms not currently doing any green project work, the primary driver that they think will motivate future green activity is the desire to do the right thing. This is in sharp contrast to those involved, suggesting this market is not as familiar with the business case for green building.

Click here for more key findings from the 2012 World Green Buildings Study.

Source: McGraw-Hill Construction