






{"id":26208,"date":"2021-12-08T12:07:12","date_gmt":"2021-12-08T05:07:12","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=26208"},"modified":"2021-12-08T12:07:12","modified_gmt":"2021-12-08T05:07:12","slug":"a-developers-guide-to-going-green-benefits-financing-certification","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/a-developers-guide-to-going-green-benefits-financing-certification\/","title":{"rendered":"A developer\u2019s guide to going green: Benefits, financing, certification"},"content":{"rendered":"<p>Prashant Kapoor of the International Finance Corporation explains why green buildings are lucrative investments and shares the vast number of financing options available<\/p>\n<figure id=\"attachment_26209\" aria-describedby=\"caption-attachment-26209\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-26209 size-full\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/shutterstock_1749630563.jpeg\" alt=\"\" width=\"1000\" height=\"625\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/shutterstock_1749630563.jpeg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/shutterstock_1749630563-400x250.jpeg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/shutterstock_1749630563-600x375.jpeg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/shutterstock_1749630563-768x480.jpeg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-26209\" class=\"wp-caption-text\">\u201cSince the launch of EDGE, the IFC has been able to invest in green building projects. So far, IFC has deployed USD6 billion in green building investments.\u201d MEEKODONG\/Shutterstock<\/figcaption><\/figure>\n<p>In business, as much as we claim to be open to new innovations or advanced methodologies, we would always turn to the least risky option \u2013 and\u00a0rightfully so, seeing as change meant potentially losing valuable work hours, manpower, and capital.<\/p>\n<p>Be that as it may, new tools or processes often\u00a0lead to improved productivity and\u00a0greater savings if implemented correctly.<\/p>\n<p>This is the case with green buildings in real estate. \u00a0The industry alone is complex and tricky as it is, \u00a0consistently demanding developers to manoeuvre a wide array of financing problems, commercial feasibility issues, regulations, and the like.<\/p>\n<p>With the dire impact of climate change manifesting all around us, the real estate industry has a major role to play to mitigate the adverse effects. But who are we to compel them to make a change\u00a0when they are the ones staking all their resources?<\/p>\n<p>At the first virtual edition of the annual PropertyGuru Asia Real Estate Summit, Prashant Kapoor,\u00a0the chief industry specialist for green buildings and climate-smart cities at the International Finance\u00a0Corporation (IFC), a member of the World Bank,\u00a0answers the Whys and Hows of green building and green financing.<\/p>\n<p><strong>A<\/strong><strong>\u00a0<\/strong><strong>lucrative<\/strong><strong>\u00a0<\/strong><strong>investment<\/strong><strong>\u00a0<\/strong><strong>opportunity<\/strong><\/p>\n<p>From designing and planning to construction and maintenance, building green will involve more\u00a0resources than what is normally asked for. \u201cBut\u00a0what\u00a0if\u00a0I\u00a0say\u00a0to\u00a0you\u00a0that\u00a0there\u00a0is\u00a0simply\u00a0too\u00a0big\u00a0an<br \/>\nopportunity\u00a0to\u00a0miss,\u201d\u00a0pressed\u00a0Prashant.\u00a0\u201cThere\u00a0is\u00a0a\u00a0huge opportunity\u00a0in\u00a0terms\u00a0of\u00a0investments,\u00a0but also to reduce climate change impacts.\u201d<\/p>\n<p>According to IFC\u2019s analysis, green buildings are a USD24 trillion investment opportunity in emerging markets, making it one of the top priorities for investment.<\/p>\n<p><strong>South<\/strong><strong>\u00a0<\/strong><strong>Africa<\/strong><strong>\u00a0<\/strong><strong>takes<\/strong><strong>\u00a0<\/strong><strong>the<\/strong><strong>\u00a0<\/strong><strong>leap<\/strong><\/p>\n<p>During a business development\u00a0trip in South Africa, Prashant noticed that most developers\u2019 portfolios consisted of affordable housing. Once he introduced the idea of affordable green housing,\u00a0he shared that he was mostly met with doubt and cynicism.<\/p>\n<p>Nonetheless, they were able to persuade the creation of an affordable housing fund called the International Housing Solutions, which aims to build 2,000 resource-efficient homes through the use of EDGE,\u00a0 an app developed by IFC that is both a universal\u00a0standard and a certification system.<\/p>\n<p>He revealed that the fund managers were concerned as they did not only have to prove to themselves that the projects were worth it, but they also had to persuade their project development partners. Eventually, all parties took a chance and seized the opportunity.<\/p>\n<p><strong>A worthy endeavour<\/strong><\/p>\n<p>Baldwin Properties, one of the biggest residential developers in South Africa, works with the housing fund. The success of their green developments inspired the CEO to certify 16,000 units throughout 10 of their projects across the country.<\/p>\n<p>Seeing a window of opportunity, large local bank Absa decided to offer green mortgage products to homebuyers.<\/p>\n<p>\u201cAs you can tell, all of these situations have nicely snowballed into a market transformation and we\u00a0have since been able to replicate this kind of outcome in other places in Asia, Latin America, and other parts of Africa,\u201d continued Prashant.<\/p>\n<p>Going green did not only benefit developers and banks, but also homeowners of green residences who reported 40 percent savings in utility bills.<\/p>\n<p><em><img decoding=\"async\" class=\"alignnone wp-image-26211\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177.jpeg\" alt=\"\" width=\"1000\" height=\"531\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177.jpeg 2018w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177-400x212.jpeg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177-600x319.jpeg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177-768x408.jpeg 768w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img177-1536x816.jpeg 1536w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/em><\/p>\n<p><strong>Easier<\/strong><strong>\u00a0<\/strong><strong>process<\/strong><strong>\u00a0<\/strong><strong>for<\/strong><strong>\u00a0<\/strong><strong>developers<\/strong><\/p>\n<p>Aside from proving that green buildings are a\u00a0worthy investment, Prashant shared that IFC has been trying to break down all the barriers that have prevented the industry from taking a plunge by\u00a0coming up with solutions that would make the process easier and more affordable to everyone.<\/p>\n<p>They also had to find a way for developers to showcase their green credentials, which is why\u00a0they established the existing green building certification programmes like LEED. However, they found that the existing ones are too daunting, expensive,\u00a0 complicated, and time-consuming for their client\u2019s\u00a0mainstream projects.<\/p>\n<p>\u201cEmerging markets, where most of our buildings happen to be, require a simple, quick, and affordable rating system to make it accessible,\u201d he explained.<\/p>\n<p>And that is how EDGE came to be. This tool allows developers to input the building type and location;\u00a0 calculate the energy, embodied energy, and water usage of the building; apply for the EDGE standard; and optimise for the lowest cost \u2013 in just a few clicks.<\/p>\n<p>Prashant added: \u201cSince the launch of EDGE, IFC\u2019s been able to invest in green building projects, such as schools, housing, hotels, offices from our old account, as well as through investments in banks. So far, IFC has deployed USD6 billion in green building investments.\u201d<\/p>\n<p><strong>Underlying<\/strong><strong>\u00a0<\/strong><strong>worry:<\/strong><strong>\u00a0T<\/strong><strong>he<\/strong><strong>\u00a0<\/strong><strong>cost<\/strong><\/p>\n<p>With green buildings, cost outcomes and monetary gains have always been a concern. Fortunately,\u00a0growing evidence across several markets reveals that the incremental cost of building green is much lower\u00a0than what most assume, particularly when green measures are adopted early on in the design and planning stage.<\/p>\n<p>According to IFC, only around one to two percent\u00a0of the construction cost is devoted to the greening of affordable housing projects. This seemingly small percentage can actually yield high returns to building owners across major sectors in real estate, whether residential, commercial,\u00a0 or industrial.<\/p>\n<p>But what better way to illustrate the\u00a0point than to\u00a0share\u00a0some\u00a0green\u00a0financing success\u00a0stories\u00a0of their\u00a0clients:<\/p>\n<p><em>A winning\u00a0strategy<\/em><\/p>\n<p>Asia\u00a0Green\u00a0Real\u00a0Estate,\u00a0a\u00a0company\u00a0that\u00a0invests\u00a0in building projects across Asia, has discovered a winning<br \/>\nstrategy\u00a0to\u00a0appeal\u00a0to\u00a0institutional\u00a0investors.\u00a0This\u00a0asset\u00a0manager\u00a0provides opportunities\u00a0to private and<\/p>\n<p>institutional\u00a0investors\u00a0who\u00a0are\u00a0looking\u00a0for\u00a0both\u00a0financing\u00a0and sustainability\u00a0returns.<\/p>\n<p>To\u00a0attract\u00a0capital\u00a0from investors and establish a strong portfolio, they managed to become an EDGE Champion, which meant that all their projects that qualify for financing must commit to the EDGE standard before\u00a0any\u00a0transaction\u00a0proceeds.<\/p>\n<p><em>Leading<\/em><em>\u00a0<\/em><em>the<\/em><em>\u00a0<\/em><em>commercial<\/em><em>\u00a0<\/em><em>sector<\/em><\/p>\n<p>ArthaLand is a pioneering developer in the Philippines that built the Century Pacific Towers, the\u00a0first green-certified zero carbon building in the\u00a0world. To finance this construction, they used a\u00a0green bond that received such high demand,\u00a0enabling them to raise USD59 million.<\/p>\n<p>In 2019, the developer took home the Best Commercial Green\u00a0 Development (Asia) title at the PropertyGuru Asia\u00a0Property Awards Grand Final, further proving their reign in terms of sustainable developments across the region.<\/p>\n<p><strong>Going green:\u00a0The process<\/strong><\/p>\n<figure id=\"attachment_26213\" aria-describedby=\"caption-attachment-26213\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-26213\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1.jpeg\" alt=\"\" width=\"1000\" height=\"562\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1.jpeg 2048w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1-400x225.jpeg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1-600x337.jpeg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1-768x432.jpeg 768w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/12\/img156-2048x1151-1-1536x863.jpeg 1536w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-26213\" class=\"wp-caption-text\">\u201cSince the launch of EDGE, the IFC has been able to invest in green building projects. So far, IFC has deployed USD6 billion in green building investments,\u201d shared Prashant during his Finance Keynote session at the 2020 PropertyGuru Asia Real Estate Summit<\/figcaption><\/figure>\n<p>To get started on the journey toward \u00a0fighting climate change, Prashant shared the following guidelines:<\/p>\n<p>1.\u00a0<strong>Meet green building definitions compatible with the financing industry.\u00a0<\/strong>The project or development must be at least 20 percent resource-efficient\u00a0and\u00a0must be\u00a0certified\u00a0as green\u00a0by a\u00a0reputed body.<\/p>\n<p>2.\u00a0<strong>Start planning a vision for the future.\u00a0<\/strong>Instead of\u00a0choosing a few\u00a0flagship\u00a0green projects, he suggests taking a portfolio approach.\u00a0One must keep in mind that investors are already asking, \u201cWe like that you have a few green projects, but what are you going to do in order to get us to the Paris Agreement in 2030\/2050?\u201d<\/p>\n<p>3.\u00a0<strong>Reach out to banks and investors.\u00a0<\/strong>Find someone\u00a0who will be able to\u00a0support you financially or provide free technical assistance.\u00a0You can even\u00a0urge your real estate association to convince the banks to create green building products, which will benefit you, your bank,\u00a0and your customers.<\/p>\n<p>A\u00a0huge\u00a0number of green developments\u00a0have been popping up throughout the\u00a0Asia Pacific region in the past\u00a0years.\u00a0And as these numbers grow, the processes\u00a0and resources of going green will be even more accessible and affordable\u00a0for everybody.<\/p>\n<p><em>The original version of this article appeared in\u00a0<a href=\"https:\/\/www.asiarealestatesummit.com\/living-sustainably-and-responsibly-for-our-future-and-our-childrens-future\/\" target=\"_blank\" rel=\"noopener\">asiarealestatesummit.com\/<\/a>. Write to our editors at <a href=\"mailto:propertyreport@propertyguru.com\" target=\"_blank\" rel=\"noreferrer noopener\">propertyreport@propertyguru.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>IFC&#8217;s Prashant Kapoor explains why green buildings are lucrative investments and shares the vast number of financing options available<\/p>\n","protected":false},"author":9,"featured_media":26209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[816,94],"tags":[613,681,2527,462],"class_list":["post-26208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-real-estate-summit","category-views","tag-green-buildings","tag-green-financing","tag-green-investment","tag-sustainability","news_country-asia","news_author-gynen-kyra-toriano"],"acf":[],"yoast_head":"<!-- This site is optimized with 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