Good environment for green buildings in Malaysia

The PTM Green Energy Office building in Kuala Lumpur was built with sustainability in mind.

Demand for green buildings will continue to rise in Malaysia in 2011, not only because more corporations are becoming environmentally aware but because they make financial sense as well.

CB Richard Ellis Malaysia vice president of research Nabeel Hussain said that there is a growing recognition amongst the country’s real estate sector about the need to adopt sustainable building practices in order to fight climate change, according to an article in The Star newspaper. Developers in Malaysia who chose to go the green route in 2010 were also given benefits by the government for the first time.

“Malaysia has introduced its own green rating system, the Green Building Index (GBI) in 2009. The government is supporting the drive towards green buildings and technology and its Budget 2010 was the first one ever to give priority to the procurement of goods and services that are environmentally friendly,” said Nabeel.

This comes on the heels of a study by CB Richard Ellis on property markets in the US and Australia that concluded that sustainably managed buildings generate stronger returns than traditonally managed buildings. The study showed that green buildings can help landlords achieve higher values, fetch higher rents, and enjoy higher occupancy rates than comparable non-green buildings. Owners of sustainably-managed buildings anticipate 4 per cent higher return on investment than owners of traditionally-managed buildings, as well as 5 per cent increase in building value

“Roughly 79 per cent of owners surveyed believe that sustainable properties perform well in attracting and retaining tenants, yielding a 5 per cent increase in building occupancy and 1% increase in rental income,” Nabeel says.

The study is a joint project between CB Richard Ellis and the University of San Diego’s Burnham-Moores Center for Real Estate and is in its second year. According to the study, roughly 10 per cent of tenant respondents have seen increased productivity, 94 per cent of tenant managers register higher employee satisfaction in green space and 83 per cent of tenants believe their green space provides a healthier working environment.

The study defined a green building as those with Leadership in Energy and Environmental Design (LEED) certification at any level or those that bear the EPA Energy Star label. All Energy Star buildings in the survey group had been awarded that label since 2008. Most of the buildings included in the research cohort had also adopted other sustainable practices like recycling, green cleaning and water conservation.