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News Release

Bangkok

Securing Green Offices Requires Good Strategy


To go green, developers may find less difficulties these days as there are experts and consultants who are available to assist with developing green real estate. However, to become a green tenant could be a different story, particularly in countries like Thailand where best practices and case studies remain limited.
 
Many companies operating in Thailand have incorporated sustainability in their corporate social responsibility (CSR) programs. Most of them have implemented green initiatives that focus mainly on behaviors of their employees by encouraging them to use electric power, water supply, stationery and other resources efficiently.
 
Over the past few years, some companies have made more sustainability efforts to turn their organization as a truly green workplace. Part of these efforts is to secure offices in a green building.
 
How to identify a ‘green building’
Green buildings are those that are designed to have the least overall adverse impact on the environment. This can be achieved by using energy, water and other resources efficiently; protecting health of occupants within the building; and minimizing waste, pollution and environmental degradation.
 
Landlords are becoming increasingly aware that green buildings offer a competitive advantage in terms of cost savings through energy reduction and also attract potential lessees. While new development projects tend to incorporate green features in design, construction, building systems and practices, some landlords of older buildings are changing the way they operate and manage their property in order for the property to become sustainable. Consequently, a growing number of buildings in Thailand are claimed to be green.
However, not many of these buildings are certified by a green building rating body. This is partly because Thailand rolled out its own green building rating system just this year –Thai Rating of Energy and Environmental Sustainability (TREES). The rating system was established by the Thai Green Building Institute, the collaboration between the Association of Siamese Architects and the Engineering Institute of Thailand.
 
In addition, there are a few office buildings in Thailand that were designed and constructed to meet standards set by international rating bodies such as the US-based Leadership in Energy and Environmental Design (LEED).
 
As a result, the challenge for sustainability-oriented tenants is to identify which buildings, though not certified, can still be considered green.
 
The following are some guidelines that may be of help to tenants looking for a green building to locate their offices.
 
For a building that is claimed to be green but is not certified according to standards set by a reliable rating body, tenants should specify their own set of criteria based on their sustainability objectives. The criteria will help tenants assess if the prospective office building meets their sustainability requirements such as eco-friendly design, efficiency of ventilation and air conditioning systems and availability of renewable energy.
 
Aside from the physical features and systems of the building, tenants should also look at the non-physical aspects such as building-wide recycling program, use of environment-friendly janitorial supplies and practices.
 
Green lease

In order to measure system performance and ensure building standards are met on an ongoing basis, a monitoring and data collection system must be in place. The tenant must have access to the data either on a continuous basis or via periodic reports that cover the tenant’s overall sustainability metric requirements.
 
All these must be indicated in the lease agreement to make sure that the landlord maintains specified sustainability standards throughout the lease period. The lease should include penalties such as rent reduction for failure to maintain the standards required by the tenant.
 
Nothing comes for free

Now the question is whether or not the landlord can pass sustainability costs to tenants.
 
Environmentally conscious features can generally add a high value to any property. The landlord and the tenants alike will reap the benefits of having a green building, and therefore should share the benefits as well as the cost burden.
 
In a truly green building, the cost sharing may be reflected by relatively higher rentals that the building achieves, compared to non-green buildings of the same grade in the same area. Many tenants are willing to pay higher rental premiums as they realize the real value that a green building can deliver by helping them save money over time through lower electricity and water bills.
 
However, for an older building that was not designed and developed to be green originally, the main reason for the landlord to turn the property into a green building is to achieve cost saving through energy reduction. As a result, it is usually assumed that the landlord does not have the right to pass such costs to existing tenants.
 
Nonetheless, when it is the first tenant in the building requiring building-wide sustainability practices in its lease, the landlord may impose the costs on the particular tenant rather than passing them through to all tenants on a pro rata share basis. This is because other tenants may not care about sustainability and therefore may be unwilling to pay the additional cost.
 
In the end, all these will come down to the benefits that the tenant is looking for a green workplace. There are also other options which allow the tenant to have green offices in a building that may not be green. For example, when building a new office or renovating the existing one, the tenant can make a green office by minimizing material usage and wastage during construction and fit-out through efficient design and planning, incorporating recycled materials into the construction and fit out and using eco-friendly office furniture.