Section 6: Building a business case
Blue Books
cost reduction), HPBs are consistently assessed as more valuable. 40 North American studies suggest that the net present values (NPVs) of sustainable buildings range from US$540-4,300/m2 depending on the time period for the analysis (20 to 60 years) and the level of ‘greenness’: generally, the greener the building, the higher the NPV.41 Figure 15
Operational costs are many times greater than construction costs
The highest proportion of lifetime building costs occur in the operational phase Other First Costs
Operating Costs
Source: Morton 2002
Good for commercial reputation HPBs are a means of showcasing corporate social responsibility (CSR)
With social research in almost all developed and many developing countries showing that environmental issues are high on the list of citizens’ concerns, shareholders and other investors are increasingly anxious to ensure that companies they invest in are seen as environmentally responsible, in order to protect the public reputation of a company, and provide it with opportunities to differentiate itself by marketing corporate social responsibility or CSR.
Decline in tenancy churn Increased tenant satisfaction decreases change of tenants
A Canadian study suggests that HPBs may result in an actual decline in churn rates because of increased occupant comfort and satisfaction. Furthermore, the modular design features commonly incorporated in such buildings, such as raised floors and moveable partitions, can lower the costs of accommodating churn: ‘for example, raised floor systems utilise the spaces beneath the floor for cabling, electrical wiring, and ventilation, and it is generally easier and less costly to relocate specific elements (such as electrical outlets or data ports) in buildings with raised floor systems.’42
40
Davis Langdon 2007 (above).
41
Lucuik, M. et al. (2005) A Business Case for Green Buildings in Canada, a report prepared for Industry Canada by Morrison Hershfield <http://www.cagbc.org/uploads/A%20Business%20Case%20for%20Green%20Bldgs%20in%20Canada.pdf> 42
October 2008
Lucuik, 2005 (above).
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