Mitesh Bhawan, MD of Broll Property’s Energy, Water and Sustainability division (Broll EWS)
reflects on how “the green movement” has permeated all facets of modern life, and the real estate
sector, as one of the major carbon emitters, has had to prioritise and incorporate
sustainability across its supply and value chain, from property management to construction,
infrastructure, and technology.
A green building is a structure developed to be environmentally friendly and resource-
efficient throughout its lifecycle, from the building materials used during construction to its
design, operation, and management. Both globally and domestically, there are various
bodies, organisations, and indexes used to categorise, rate, and provide accreditation for
green buildings such as The MSCI Global Green Building Index and The Green Building
Council South Africa (GBCSA).
As support for a net-zero future and reducing carbon emissions continue to swell, the
prestige and financial value of green buildings rise. With companies increasingly reporting
on their sustainability progress, owning or renting a green building is an important
objective, often included as a key performance indicator for executive leadership.
The “green premium” describes exactly this, the higher price to rent or buy buildings with
certified sustainability credentials. For land owners, developing, selling, or leasing their
green building can be financially lucrative as research indicates that green buildings enjoy
higher occupancy, higher rents, and higher tenant retention.
Importantly, this value is also shared among a green building’s tenants and occupants, who
courtesy of an environmentally-friendly design, enjoy enhanced health and mental wellness
through ideal working spaces and improved air and water quality – leading to higher
In South Africa, although green real estate is growing, particularly in the private sector,
overall it is still in the minority, which is a threat to the industry. The “brown discount”,
which is the antithesis of the green premium, describes the depreciating value that the
market places on buildings that fail to live up to current environmental standards. Public
sector real-estate land owners such as municipalities and the government, who have
numerous historical buildings and offices under their management, can mitigate against this
threat through retrofitting.
Retrofitting real estate involves changing a building’s systems and structures after its
construction. Admittedly, this can be a time-consuming, and resource-intensive process
requiring specialised expertise, however, the alternative, which is burying one’s head in the
sand, and doing nothing is not an option.
Managing consumption is critical to sustainability. South Africa is classified as a water-scarce
country and given the continued difficulties at the national power utility, to survive in this
milieu, we are forced to do more with less. In this current context, effective building
management systems are essential to reducing utility costs and wastage. One of the first
steps is to implement a smart meter programme to monitor the consumption of electricity
For example, by tracking and comparing a building’s activity and non-activity-based energy
and water consumption, benchmarks can be developed, which can be later used to identify
wastage, leaks, and other deficiencies that should be eliminated. In the worst instances, in
some buildings as much as 60% to 70% of its consumption occurs when no one is there,
which is extremely inefficient and detrimental to the environment.
Sustainable and environmentally friendly practices within the built environment are still
relatively new concepts and in developing economies like South Africa there still exists a
skills and knowledge deficit.
Nevertheless, as regulations governing environmental, social, and corporate governance
frameworks are steadily introduced, and financiers increasingly request information about
an entity’s carbon footprint, the industry will have to align with global best practices for its
These are the reasons that drive South African corporates to opt for established real-estate
advisory firms to provide consultancy services and effective building management so that
they can focus on their core business processes. However, resource
efficiency and demand management services can help companies and landowners of all
sizes, including small and medium-sized enterprises.
If our goal is a net-zero future defined by just inclusive growth, then sustainable
development is the pathway along which we must travel. Using the technology and
expertise at our disposal, as the Former Prime Minister of Norway, Gro Brundtland,
explained, “to address the needs of the present without compromising the ability of future
generations to meet their own needs.”