Market Premises of Sustainable Certification
Text: Dr. Roman Wagner-Muschiol, Tajo Friedemann
With the introduction of a seal of quality by the German Society for Sustainable Building (DGNB) in January 2009, the construction and property market in Germany now has a label of its own for assessing the sustainable qualities of built objects. The first steps taken in using this evaluative tool have been somewhat shaky. In many cases, building projects are faced with cancellation and delays due to lack of financial means. On the other hand, increasing interest is being shown in cost reductions during actual operations and in greater profitability as a direct result of the sustainable qualities of buildings – something that may help to establish the introduction of this certification of quality more quickly. In particular, the increasing number of people seeking to lease or rent “Green” accommodation should help accelerate the integration of certified forms of sustainability into the property market cycle. A rapid advance of the German certificate may also be expected, since many of the goals it seeks to attain reflect important aspects of present-day and future regulative requirements, such as integral energy and indoor-climate packages as well as existing standards of procedure in the realm of construction. In addition to the active support given by the Federal German Ministry for Transport, Building and Urban Development (BMVBS), the proliferation of the DGNB seal will enjoy the backing of the public sector.
The fact that the German certificate has little time to assert itself, despite state support, is not attributable solely to difficult market conditions. The DGNB and BMVBS are introducing their evaluative tool at a moment when rival instruments have already overcome their teething troubles and are fast developing into internationally recognised certificates of sustainability.
The strongest rival at present is the US evaluative process Leadership in Energy and Environmental Design (LEED), which in view of its simple systematics and wide range of applications is enjoying ever greater popularity on property markets. LEED facilitates a clear depiction of the sustainable qualities of new office buildings for self-use, of speculatively built properties, as well as internal conversions and fitting out in existing structures. As a result, in assessing investment and leasing options, and the optimisation of ongoing management factors, investors, tenants and owners of existing properties can compare across national borders those aspects of sustainability that are relevant to them. Europeans involved in the property market willingly accept measurements of performance based on North American standards – often at considerable cost – in making comparisons with building and quality standards at home. The introduction of a revised version, designed to overcome this deficiency, is scheduled for the middle of 2009. In addition to this, the German seal of quality will have to face up to competition from Britain. An international version of the Building Research Establishment Environmental Assessment Method (BREEAM) has been in existence since last autumn. What is more, in view of the partiality of the International Council of Shopping Centers, one can expect this system to be a success especially in the evaluation of retail trade properties and objects of mixed use in Britain and continental Europe. At first sight, the performance of the DGNB seal to date might seem somewhat weak in comparison with that of the rival systems from Britain and America: it has only just passed through the pilot phase; its first version applies solely to office and administrative buildings; and there is no English translation as yet. If you analyse the catalogue of criteria and weighting factors of the respective systems, however, it becomes apparent that the German certificate takes comprehensive account of the economic and socio-functional qualities involved in the process of assessing property-market factors, whereas LEED and BREEAM leave a number of gaps in terms of these evaluative criteria. But in view of the scope that LEED and BREEAM allow for international application, we are witnessing an important phase in the certification of sustainability at present – one in which the process is beginning to pervade the market. Permanent market acceptance can be achieved and maintained only with contents that exhibit the appropriate qualities. In a competitive situation, though, lasting success will be achieved only by the system that manages to represent the specific interests of the property market in the clear and comprehensible language of quantifiable values. Social sustainability and market acceptance
The property market can comprehend sustainable features as qualities only if they manifest themselves in direct or indirect pecuniary values. For long-term success, therefore, an evaluative system must be in a position to bring home to persons with an active interest in the market the correlation between the sustainable qualities of an object on the one hand, and the profitability and risks involved on the other. The aim of LEED and BREEAM is to depict a performance defined primarily in technical and ecological terms. In comparison, the DGNB seal goes a step further in its evaluation by taking account of the socio-functional qualities of an object. This would seem to be an appropriate approach in depicting the correlation between economics, ecology and social quality. After all, market acceptance of a commercially used object comes about in the first instance as a result of its social characteristics. The scope that exists for placing a property on the market and making a profit from it by representing its sustainable qualities will rise or fall depending on whether it is attractive as a rented or leasehold object. In this context, we should remember that well over three quarters of the operational costs of modern service undertakings are spent on staff salaries. Especially in times of economic recession, the motivation and efficient performance of members of staff produce better results in ensuring the profitability of a concern than money spent on electricity, water and waste disposal, for example. Experience shows that decisions to rent or lease a property are based largely on factors like the quality of encounters between members of staff, user comfort, aesthetic-haptic properties and scope for flexibility in the layout and design. Outlook for the future
The future of evaluative systems lies in their ability to convey to property investors, owners and tenants a clear picture of the sustainable characteristics to be found in the use of an object. The number of applications to lease or rent “green” space is, therefore, a good indicator of the market acceptance of the respective evaluative systems. Only when these meet the primary interests of tenants, however, will certificates of sustainability be able to assert themselves in the market in the future. Furthermore, in the long term, the German seal of quality will be able to maintain its validity only if it manages to establish itself as an international standard in the same way as its Anglo-Saxon counterparts. To obtain broad market acceptance with a future perspective, one must succeed in demonstrating direct economic advantages to property users. In all events, the interests of the tenant must play a central role. Dr Roman Wagner-Muschiol is associate director and team leader at Jones Lang LaSalle in Frankfurt. In 2006, he established the discipline of strategic architecture.
Tajo Friedemann, strategic consultant at Jones Lang LaSalle in Frankfurt, is responsible for questions of energy efficiency and sustainability in building.