This April 27, 2021 photo shows Singapore’s South Beach complex designed by Foster + Partners for City Developments Ltd. (PHOTO / BLOOMBERG)
On a typically hot and humid afternoon in Singapore, a fresh breeze blows beneath the canopy of the South Beach development, keeping temperatures several degrees cooler than on the surrounding streets.
The rippling 280-meter wave of steel-and-aluminum runs the length of the Norman Foster-designed complex, funneling prevailing winds over outdoor patrons of restaurants and bars and saving on air conditioning for the mixed-use complex. The canopy is covered with solar panels and catches rainwater to irrigate the gardens.
Offices and apartment blocks designed to be green are springing up all over the world as architects reverse almost a century of trying to insulate workers from nature and instead try to adapt structures to their natural surroundings. The change is being driven by stricter building codes, a desire to cut energy costs and, in particular, demands from corporations and startups that need to show shareholders and customers they are meeting environmental standards.
“There’s a growing shift toward including the green credentials of a building within what constitutes competitive advantage for a developer,” said Gabriel Wilson-Otto, global head of sustainability research at BNP Paribas Asset Management in Hong Kong Special Administrative Region (HKSAR). Regulators are also driving change because energy-efficient buildings are “very effective” at de-carbonizing cities, he said.
In this undated photo, outdoor bars and restaurants along the pedestrian avenue at the South Beach development are shaded from the heat by a solar-panel covered canopy that funnels a cooling breeze. (PHOTO / BLOOMBERG)
Buildings in Asia often account for a higher percentage of greenhouse gas emissions than the worldwide average.
Philippe Delorme, Executive vice-president for energy management at Schneider Electric SE
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Commercial and residential buildings account for around 12 percent of greenhouse gas emissions globally, according to the European Environment Agency. A review of 70 studies by researchers at Finland’s Aalto University showed that green building cuts operating expenses, raises rental income and increases the capital value of properties.
But the tropics present a unique set of challenges and opportunities to architects, from constant heat and humidity to intense downpours and in some areas violent storms. Solving those issues will be critical to reining in global warming. By 2050, the Paris deadline for the world to become carbon-neutral, half the world’s population will live in the tropical belt, up from 40 percent now, and wealth, urbanization and industrialization are expected to increase faster in the region than other latitudes.
“Buildings in Asia often account for a higher percentage of greenhouse gas emissions than the worldwide average,” said Philippe Delorme, executive vice-president for energy management at Schneider Electric SE.
Singapore, just 1 degree north of the equator, has seen a plethora of green buildings since the government launched its voluntary Green Mark Certification Scheme in 2005. South Beach, built by City Developments Ltd., is rated platinum under the system, meaning it can achieve more than 30 percent energy savings compared with a traditional building.
“Energy efficiency is a no-brainer in a tropical city like Singapore,” said Esther An, chief sustainability officer at City Developments, ranked as Asia’s most sustainable property developer in 2021 by Corporate Knights Inc. “Green building helps bring back return on investment.”
Cost saving aren’t the only driver though. Developers are facing increasing demand from companies and startups that want to burnish their green credentials. Those looking for the highest certifications include multi-nationals that need to report ESG standards to shareholders and data centers keen to cut operating costs, said Tim Lo, head of system development at BEAM Society, a certification system in HKSAR. “Shopping centers, large or small, are also jumping on the bandwagon for green buildings because the shoppers want a healthier space.”
In HKSAR, office buildings with the highest credentials get a 37 percent premium in rent compared with non-green rated buildings, said Roddy Allan, chief research officer for Asia Pacific at Jones Lang LaSalle.
This Sept 5, 2020 photo shows Rio de Janeiro’s Museum of Tomorrow during its reopening. (PHOTO / BLOOMBERG)
Meeting the highest standards involves a lot more than adding solar panels. Using cement and materials that generate less CO₂ during production, vegetation and geometry that deflects the sun’s rays are among dozens of technologies employed to reduce the carbon footprint and running costs of a structure. To attract top-end tenants, companies often employ world-renowned architects to ensure buildings also offer status as well as sustainability.
For tropical cities, a key metric is to build structures that not only look cool, but are cool. As the global temperature rises, keeping the heat down in the tropics has inspired a number of innovative technologies, from Rio de Janeiro’s Museum of Tomorrow, which utilizes cold water from the bottom of neighboring Guanabara Bay, to the hanging gardens of Singapore’s ParkRoyal hotel and the angled shading of the Suruhanjaya Tenaga Diamond Building in Malaysia.
The need to integrate those new systems into buildings is prompting tie-ups and mergers between technology firms, construction companies and city governments. One trend especially popular in big Chinese cities like Beijing and Shanghai, is to integrate solar panels into the fabric of new buildings. Longi Green Energy Technology Co., the world’s largest solar producer, bought a 27 percent stake in a building materials maker this year to expand its ability to include photo-voltaic systems during construction.
Sustainable developments offer property companies another increasingly important resource—a bigger financing pool. Real estate has been a driving force in the fast-expanding debt market, with Fannie Mae in the US one of the biggest issuers. City Developments issued Singapore’s first green note in 2017, while CapitaLand Ltd. followed last year.
HKSAR’s New World Development Co. issued a sustainability-linked dollar bond in January that broadened New World’s investor base, with 80 percent of the debt going to ESG investors, said Ellie Tang, head of sustainability. A “very aggressive target” to achieve 100 percent renewable energy for its Great Bay Area rental properties by 2026 was part of the offer, she said. Green financing can lower funding costs as well as broadening the investment pool, said Fanny Lung, finance director at Swire Properties Ltd., which issued its first green bond in 2018 to raise $500 million.
Part of the problem for builders and tenants alike is a lack of consistency in green certification. Mostly, a patchwork of voluntary codes has sprung up from governments, city administrations and private rating companies. The US has the LEED rating system run by the US Green Building Council. The European Union is trying to put together a comprehensive assessment system for the bloc and introduced criteria to determine whether assets, including property, are green came in July 2020. In the Chinese mainland, seven government ministries published an action plan the same month that called for 70 percent of urban construction to be green by 2022.
In this undated photo, the K11 Musea shopping mall in Hong Kong, owned by New World Development Co. (PHOTO / BLOOMBERG)
There’s a clear environmental benefit to building green but investing in green building also means significant operating cost savings, shorter payback periods and an overall increase in the value of these assets.
Melissa Baker, Senior vice-president of LEED technical development at the US Green Building Council
In the tropics, such robust assessment programs are scant, giving multinationals an added incentive to locate regional offices in wealthy cities such as Singapore and HKSAR that have verifiable programs to certify green credentials.
For many tenants and builders, the main obstacle is the initial construction cost. In the 2018 World Green Building Trends survey, almost half the respondents cited cost as the top obstacle, followed by lack of political support or incentives, a lack of public awareness and a perception that green construction is only for high-end projects.
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That makes green construction highly sensitive to economic conditions. In Southeast Asia, the number of green-certified buildings rose rapidly in the early 2000s, but then dropped off sharply after the 2007/08 global financial crisis, said Delorme at Schneider Electric. “While we are seeing more Asian developers building energy-efficient buildings, with Singapore leading the way in sustainable development, progress remains slow.”
Instead, many firms have resorted to upgrading older buildings. Retrofitting systems could cut energy costs by 15 percent to 35 percent depending on the level of investment, according to a study by the Urban Land Institute and others.
But as government regulations get tougher and more tenants demand the highest levels of environmental construction, greenfield developments will increasingly need to become green developments.
“There’s a clear environmental benefit to building green but investing in green building also means significant operating cost savings, shorter payback periods and an overall increase in the value of these assets,” said Melissa Baker, senior vice-president of LEED technical development at the US Green Building Council. “Developers that are not building green may find themselves at a disadvantage.”
HONG KONG NEWS