RICS makes the commercial case for green buildings

Clients are willing to pay more for “green” buildings than traditional ones, according to a report published by the RICS to coincide with Energy Saving Week.

According to the RICS Green Value report, environment-friendly buildings are worth more because in the long term they cost less to operate and maintain.

Chris Corps, a RICS spokesperson and former chairman of RICS Canada, said green products could add to a building’s value. The RICS in Canada conducted the report by looking at buildings in North America and the UK.

“The evidence is clear that green buildings aren’t just ethically desirable,” said Corps. “They make money, pure and simple.”

The study said a UK online survey in June 2004 showed that 82% of 912 respondents would be willing to pay 2% extra for an environment-friendly home. And 17% said they would be willing to go as high as 5% extra.

The RICS also said 15% of buyers at an EcoHomes scheme in Warrington, Cheshire, said they would be willing to pay more than 6% extra for a green home.

These findings contradict the results of a recent Linden Homes survey.

It’s not just a good thing to do. It makes money

Chris Corps, RICS

The report says the return on an environment-friendly product on a building is about 10 times the cost of installing it.

Louis Armstrong, chief executive of the RICS, said: “For the first time we’ve got enough evidence to show there is a commercial case for green buildings. It’s not just something you should do through gritted teeth.”

Armstrong added that firms were willing to pay more because of the financial benefits from increased productivity. “A green building isn’t just something you feel you ought to have,” said Armstrong. “Your accountant and HR manager will both say it’s good for your business.”

The report quotes figures compiled by Turner Construction, a US contractor, in 2004. This found that 86% of building professionals said working in environment-friendly buildings improved the health and well-being of occupants. Seventy-nine percent said green products increased the value of the building while 76% said they resulted in higher productivity.

Armstrong hopes the report will help change the minds of the 70% of executives identified who think green buildings are unnecessarily expensive and do not offer enough benefits.

The RICS study was carried out in partnership with 10 government and private sector organisations.