Is intrinsic energy efficiency reflected in the pricing of office leases?

This paper investigates whether the intrinsic energy efficiency rating of an office building has a significant impact on its rental value. A sample of 817 transactions for offices with Energy Performance Certificates (EPCs) in the UK is used to assess whether a pricing differential can be identified, depending on the energy rating. While previous analyses of this topic have typically relied on appraisal-based and/or asking rent data, the dataset used in this research contains actual contract rents as well as information on lease terms. The results indicate a significant rental premium for energy-efficient buildings. However, it is found that this premium appears to be mainly driven by the youngest cohort of state-of-the-art energy-efficient buildings. The results also show that tenants of more energy-efficient buildings tend to pay a lower service charge, but this link appears to be rather weak and limited to newer buildings. Hence, it is argued that the information contained in the EPC is still not fully taken into account in the UK commercial property market with the possible exception of both the highest and the lowest EPC ratings.

People or machines? Assessing the impacts of smart meters and load controllers in Italian office spaces

Government initiatives in several developed and developing countries to roll-out smart meters call for research on the sustainability impacts of these devices. In principle smart meters bring about higher control over energy theft and lower consumption, but require a high level of engagement by end-users. An alternative consists of load controllers, which control the load according to pre-set parameters. To date, research has focused on the impacts of these two alternatives separately. This study compares the sustainability impacts of smart meters and load controllers in an occupied office building in Italy. The assessment is carried out on three different floors of the same building. Findings show that demand reductions associated with a smart meter device are 5.2% higher than demand reductions associated with the load controller.

Thermal and visual performance of real and theoretical thermochromic glazing solutions for office buildings

Thermochromic windows are able to modulate their transmittance in both the visible and the near-infrared field as a function of their temperature. As a consequence, they allow to control the solar gains in summer, thus reducing the energy needs for space cooling. However, they may also yield a reduction in the daylight availability, which results in the energy consumption for indoor artificial lighting being increased. This paper investigates, by means of dynamic simulations, the application of thermochromic windows to an existing office building in terms of energy savings on an annual basis, while also focusing on the effects in terms of daylighting and thermal comfort. In particular, due attention is paid to daylight availability, described through illuminance maps and by the calculation of the daylight factor, which in several countries is subject thresholds. The study considers both a commercially available thermochromic pane and a series of theoretical thermochromic glazing. The expected performance is compared to static clear and reflective insulating glass units. The simulations are repeated in different climatic conditions, showing that the overall energy savings compared to clear glazing can range from around 5% for cold climates to around 20% in warm climates, while not compromising daylight availability. Moreover the role played by the transition temperature of the pane is examined, pointing out an optimal transition temperatures that is irrespective of the climatic conditions.

Energy Efficiency through Thermal Energy Storage : Possibilities for the Swedish Building Stock

The need for heating and cooling in buildings constitutes a considerable part of the total energy use in a country and reducing this need is of outmost importance in order to reach national and international goals for reducing energy use and emissions. One important way of reaching these goals is to increase the proportion of renewable energy used for heating and cooling of buildings. Perhaps the largest obstacle with this is the often occurring mismatch between the availability of renewable energy and the need for heating or cooling, hindering this energy to be used directly. This is one of the problems that can be solved by using thermal energy storage (TES) in order to save the heat or cold from when it is available to when it is needed. This thesis is focusing on the combination of TES techniques and buildings to achieve increased energy efficiency for heating and cooling. Various techniques used for TES as well as the combination of TES in buildings have been investigated and summarized through an extensive literature review. A survey of the Swedish building stock was also performed in order to define building types common in Sweden. Within the scope of this thesis, the survey resulted in the selection of three building types, two single family houses and one office building, out of which the two residential buildings were used in a simulation case study of passive TES with increased thermal mass (both sensible and latent). The second case study presented in the thesis is an evaluation of an existing seasonal borehole storage of solar heat for a residential community. In this case, real measurement data was used in the evaluation and in comparisons with earlier evaluations. The literature reviews showed that using TES opens up potential for reduced energy demand and reduced peak heating and cooling loads as well as possibilities for an increased share of renewable energy to cover the energy demand. By using passive storage through increased thermal mass of a building it is also possible to reduce variations in the indoor temperature and especially reduce excess temperatures during warm periods, which could result in avoiding active cooling in a building that would otherwise need it. The analysis of the combination of TES and building types confirmed that TES has a significant potential for increased energy efficiency in buildings but also highlighted the fact that there is still much research required before some of the technologies can become commercially available. In the simulation case study it was concluded that only a small reduction in heating demand is possible with increased thermal mass, but that the time with indoor temperatures above 24 °C can be reduced by up to 20%. The case study of the borehole storage system showed that although the storage system worked as planned, heat losses in the rest of the system as well as some problems with the system operation resulted in a lower solar fraction than projected. The work presented within this thesis has shown that TES is already used successfully for many building applications (e.g. domestic hot water stores and water tanks for storing solar heat) but that there still is much potential in further use of TES. There are, however, barriers such as a need for more research for some storage technologies as well as storage materials, especially phase change material storage and thermochemical storage.

An assessment of the energy and water embodied in commercial building construction

Growing global concern regarding the rapid rate at which humans are consuming the earth’s precious natural resources is leading to greater emphasis on more effective means of providing for our current and future needs. Energy and fresh water are the most crucial of these basic human needs. The energy and water required in the operation of buildings is fairly well known. Much less is known about the energy and water embodied in construction materials and products. It has been suggested that embodied energy typically represents 20 times the annual operational energy of current Australian buildings. Studies have suggested that the water embodied in buildings may be just as significant as that of energy. As for embodied energy, these studies have been based on traditional analysis methods, such as process and input-output analysis. These methods have been shown to suffer from errors relating to the availability of data and its reliability. Hybrid methods have been developed in an attempt to provide a more reliable assessment of the embodied energy and water associated with the construction of buildings. This paper evaluates the energy and water resources embodied in a commercial office building using a hybrid analysis method based on input-output data. It was found that the use of this hybrid analysis method increases the reliability and completeness of an embodied energy and water analysis of a typical commercial building by 45% and 64% respectively, over traditional analysis methods. The embodied energy and water associated with building construction is significant and thus represents an area where considerable energy and water savings are possible over the building life-cycle. These findings suggest that current best-practice methods of embodied energy and water analysis are sufficiently accurate for most typical applications, but this is heavily dependent upon data quality and availability.

Indoor environment quality and occupant productivity in the CH2 building

This paper presents a summary of the results from a post-occupancy evaluation study on indoor environment quality (lEO) and occupant health, wellbeing and productivity in the Council House 2 (CH2) building, which is owned and occupied by the City of Melbourne. This case study has highlighted that the productivity of office building occupants can potentially be enhanced through good building design, and provision of a high quality, healthy, comfortable and functional interior environment, that takes account of basic occupant needs.

The business case for incorporating sustainability in office buildings : the adaptive reuse of existing buildings

The effect of climate change and global warming has received increased attention in society with constant reminders about the importance of energy efficiency and sustainability in buildings. Whilst the focus is often placed on smaller items such as plastic bags, air conditioners and motor vehicles, the emphasis has recently shifted to structures in the built environment. Office buildings have been identified as contributing significantly to global warming during their building lifecycle with a substantial contribution to CO2 omissions. In response, building designs and construction techniques have evolved over time to improve energy efficiency and reduce CO2 omissions. Whilst property valuers, managers and analysts must remain up-to-date regarding changes, relatively little research has been conducted about whether and how increased sustainability, such as signified in a Green Star rating affects a property’s highest and best value and long-term lifecycle. This study investigates the degree to which sustainability is understood in the property marketplace, especially in relation to property values with the emphasis placed on a cost- benefit analysis from both an owner’s and tenant’s perspective. Whilst it may be argued that incorporating sustainability into a new office building is cost prohibitive on a financial cost-benefit analysis, often various minor steps can be taken to upgrade the sustainability of an existing building. This project examines recent trends in capital expenditure to increase the sustainability of offices and where Green Star ratings have been applied to establish whether any corresponding increase in value is evident. In order to develop a researchframework, a thorough literature review will be conducted of recent Australian and overseas studies. This will enable links between sustainability and office buildings to be highlighted, and vitally how they affect a property’s value in both the short and long-term.

Investor perception of the business case for sustainable office buildings : evidence from New Zealand

Over recent years the global market for sustainable commercial property has been growing in importance, with rapid growth occurring overseas that has led to substantial changes in the property markets. The New Zealand property industry has been recently introduced to the concept of sustainability, and although still at an early stage is already noticing the accelerating uptake of sustainability in the industry. Although certain measures have been taken by the New Zealand Green Building Council and government mandates, there remains still a common assumption that there is considerable hesitation and skeptism in the market from both an investor’s and a building owner’s perspective.

The research presented in this paper reports on the results of an investigation into the market perception toward sustainable buildings from the investment community in New Zealand. Property developers and investors from New Zealand were surveyed about their perception of sustainable buildings in New Zealand and their actions with regards to their own commercial portfolios, as well as the impact sustainability is having upon investment decisions. This paper presents the results of research conducted into the relationship between the elements of sustainability and the market value of an office building. The paper provides an insight into the rapidly evolving area of sustainability and office buildings, with the emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

The increasing importance of sustainability for building ownership

Purpose — This study seeks to investigate the degree to which energy efficiency is incorporated into office building refurbishment and capital expenditure with the emphasis placed on a cost-benefit analysis from the owner’s perspective.
Design/methodology/approach – In order to develop a research framework, a thorough literature review was conducted of three disciplines being construction technology, building refurbishment and property management. The study identifies differences between varying levels of capital expenditure to ensure an existing building is more energy efficient, with the emphasis placed on the cost of implementation and the potential for tenants to acknowledge the increased energy efficiency via higher rents.
Findings – Office buildings have been identified as a contributor to global warming during the construction phase, however during the building lifecycle there is a greater contribution to CO2 omissions. Whilst various building designs and construction techniques have evolved to improve energy efficiency, the focus has largely been placed on new buildings where it is easier to incorporate change and innovative approaches. However, the proportion of new buildings constructed each year is relatively small in comparison to existing building stock, which requires regular capital expenditure to maintain and attract new tenants within a competitive marketplace.
Practical implications – The increasing importance of energy efficiency affects the office market in a variety of different ways.
Originality/value – This paper identifies important links between the environment and the built environment, and the implications for office building owners.

The relationship between sustainability and the value of office buildings

There is an increasing body of evidence to suggest that the development of sustainability in office buildings and the acceptance of these buildings in the broader property market is increasing. However a gap still remains between the value of sustainability and the value of the building from an International Valuation Standards Committee (IVSC) definition of market value. Current literature is limited in the investigation of the impact of sustainable criteria on value component when undertaking a valuation of a commercial office building. Whilst substantial advances have been made in sustainable design and construction aspects, as well as reducing implementation costs and enhancing benefits associated with sustainability, there appears to be inherent barriers in adopting sustainability in the valuation process for the property industry.

This paper examines the limited previous research into the elements of sustainable criteria that impact upon property value, and in turn should be reflected in traditional valuation methods. The immaturity of the property market for sustainable building is such that current valuation methods do not appear to have significant evidential proof of increased property value through sales or lease evidence for sustainable buildings. Furthermore, this lack of market evidence makes it inherently difficult for valuers to assess the real market value of sustainable buildings through current valuation methodology. In other words, the level of risk associated with incorporating different levels of sustainability into office buildings appears difficult to measure using a market value perspective in today’s property market. Accordingly this paper examines current research that has been undertaken to identify particular sustainable criteria that potentially affects the value of a sustainable building. For example, previous research suggests that sustainable criteria impact upon the valuation equation through rental growth, depreciation, risk premium and cash flow. This paper also examines how other studies have viewed the impact of sustainable criteria and how they are weighted within the valuation equation. The discussion provides an insight into the rapidly evolving area of sustainability and office buildings with emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

Energy analysis of the construction of office buildings /by Graham J. Treloar

Buildings have a significant impact on the environment due to the energy required for the manufacture of construction materials. The method of assessing the energy embodied in a product is known as energy analysis. Detailed office building embodied energy case studies are very rare. However, there is evidence to suggest that the energy requirements for the construction phase of commercial buildings, including the energy embodied in materials, is a significant component of the life cycle energy requirements. This thesis sets out to examine the current state of energy analysis, determine the national average energy intensities < i.e. embodied energy rates < for building materials and assess the significance of using national average energy intensities for the energy analysis of a case study office building. Likely ranges of variation in the building material embodied energy rates from the national averages are estimated and the resulting distribution for total embodied energy in the case study building simulated. Strategies for improving the energy analysis methods and data are suggested. Detailed energy analysis is shown to be a useful indicative method of quantifying the energy required for the construction of buildings.

Using building adaptation to deliver sustainability in Australia

Purpose – This paper seeks to establish the rationale for existing office building adaptation within Melbourne, Australia, as the city strives to become carbon neutral by 2020. The problems faced by policy makers to determine which buildings have the optimum adaptation potential are to be identified and discussed.

Design/methodology/approach – This research adopts the approach of creating a database of all the buildings in the Melbourne CBD including details of physical, social, economic and technological attributes. This approach will determine whether relationships exist between attributes and the frequency of building adaptation or whether triggers to adaptation can be determined.

Findings – This research provided evidence that a much faster rate of office building adaptation is necessary to meet the targets already set for carbon neutrality. The findings demonstrate that a retrospective comprehensive examination of previous adaptation in the CBD is a unique and original approach to determining the building characteristics associated with adaptation and whether triggers can be identified based on previous practices. The implication is that a decision-making tool should be developed to allow policy makers to target sectors of the office building stock to deliver carbon neutrality within the 2020 timeframe.

Practical implications – Drastic reductions in greenhouse gas emissions are required to mitigate global warming and climate change and all stakeholders should be looking at ways of reducing emissions from existing stock.

Originality/value – This paper adds to the existing body of knowledge by raising awareness of the way in which the adaptation of large amounts of existing stock can be fast tracked to mitigate the impact of climate change and warming associated with the built environment, and in addition it establishes a framework for a decision-making tool for policy makers.

Sustainable retrofit potential in lower quality office stock in the central business district

Given the relationship between energy consumption, greenhouse gas emissions and climate change, the built environment has significant potential to lessen overall emissions. With around half of all greenhouse gas emissions attributed to the built environment; it has a significant role to play in mitigating global warming. With large percentages of office stock structurally vacant in some city centres and only 1 or 2% of new buildings added to the total stock each year; the scope for reductions lay with adaptation of existing buildings. The stock with the highest levels of vacancy and obsolescence offers the highest potential of all.

Many cities are now aiming to become carbon neutral. Successful retrofit demands that social, technological, environmental, economic and legislative criteria are addressed. Buildings have to meet user and community needs. City centres comprise a range of different type of office stock with regards to age, size, location, height, tenure and quality. All buildings present challenges and opportunities with regards to retrofit and sustainability and integrating retrofit measures that reduce energy, water and resource consumption.

Using a selection of low grade office buildings to develop retrofit profiles, this paper addresses the questions; (a) what is the nature of retrofits in relation to low quality office building stock in the Central Business District (CBD) and, (b) what is the extent and scope for sustainable retrofits to low quality office buildings. Using Melbourne CBD retrofit events of low quality office buildings were analysed between 1998 and 2008 to identify the scope and extent for integrating sustainability into retrofits projects.

Framework for improving the constructability of raised floor systems in Australian office buildings

Despite the great benefits that it can potentially contribute to modern workplace environment, raised floor system (RFS) encountered many barriers in the process of its applications for the fitout of office buildings in the Australian construction industry. Through a set of comprehensive research activities, the significant influence factors (SIFs) and problems associated with the RFS fitout implementation are identified. Further discussion of these SIFs and problems unearths a range of project level critical factors (PLCFs) pertaining to the RFS fitout design, construction, operation and maintenance, which presents firsthand checklists for the project team to review in the project delivery process. These factors need to be accommodated appropriately in order to enhance the implementation of the RFS fitout in Australian office buildings. Following a constructability study, a framework was developed by integrating these SIFs and PLCFs into the delivery of the RFS fitout in an aim to enhance the project constructability and minimize problems in the RFS service performance.

Examining the perception of tenants in sustainable office buildings

Purpose – The purpose of this paper is to address two major challenges faced by sustainable building owners: first, address the gap between an occupant’s expectations of sustainable building outcomes and what the building actually provides and second, overcome the lack of user knowledge about sustainability design and operation for a particular with regards to performance. Design/methodology/approach – This study used a focus group approach to investigate the gap between: user expectations and sustainable building performance. The study surveyed occupants of sustainable office buildings in Melbourne, Australia. Findings – There is no significant relationship between users’ expectations and users’ experience of sustainable building performance and users’ knowledge about sustainability and the building they were worked in. Research limitations/implications – The research was limited to sustainable office buildings. New office buildings seeking to incorporate sustainability which need to focus on the needs of tenants in order to maximise value. Practical implications – There is an urgent need to ensure sustainable office buildings meet the needs of present and future occupiers without compromising short and long-term occupier satisfaction levels with regards to sustainability and operation of the building. Social implications – Increasing the level of sustainability in office buildings has been a major trend over the past decade however the tenants need to be consulted in the post-occupancy phase. Originality/value – Little attention has been given in the property management literature to sustainable office buildings and value drivers. This is an original and innovative study, partly due to the recent developments in sustainable buildings.