+IMPACT MAGAZINE ISSUE 18

NEWS
NEWS
MAKING A +IMPACT
MSCI SA GREEN ANNUAL PROPERTY INDEX
Growthpoint owned
Green Star certified
Prime A-grade offices,
Draper on Main,
Claremont, Cape Town.
The latest MSCI South Africa Green Annual Property
Index continues to support the investment case for
green buildings in the commercial property sector.
The index showed that the investment performance of
certified green, Prime, and A-grade offices improved
in 2021 and outperformed non-certified assets of a
similar quality by 170bps during the year.
Now in its sixth year, the MSCI SA Green Annual
Property Index provides an independent and consistent
comparative return on investment for green-certified and
non-certified offices. Released annually in conjunction with
the Green Building Council South Africa (GBCSA) and
sponsored by Growthpoint Properties, the index provides
an independent, globally consistent view on the investment
performance of green-certified and non-certified offices.
At the end of 2021, the index sample comprised 303
prime and A-grade office properties valued at R59.1-billion
of which 153 were green-certified buildings. These were
compared to 150 non-certified offices of a similar quality.
“Once again, the MSCI index results reflect the business
case for green-rated buildings. Not only are these buildings
more efficient, reducing the cost of occupancy for tenants,
but they also provide a healthier environment for occupants,
which is particularly relevant as staff return to their offices.
The fact that green buildings achieve better returns shows
that tenants are recognising these benefits. Growthpoint
is committed to retaining its status as one of the largest
owners of sustainable properties and will continue to
pursue appropriate certifications,” says Paul Kollenberg,
Growthpoint’s Head of Asset Management: Office.
Green offices outperformed by 19.1% since 2016
For the year ended December 2021, the green-certified
office sample delivered a total return of 2.2%, 170bps
above the non-certified sample’s return of 0.5%. This was a
similar outperformance to that measured in 2020 and takes
the cumulative total return of green-certified offices to
45.2% since the inception of the index six years ago. Over
this period, green certified offices outperformed the noncertified
sample by 19.1% - an annualised outperformance
of 260bps.
A key reason behind the strong performance of green
certified offices is its comparatively high income return
despite a 29% higher capital value per square metre. This
was achieved courtesy of a 30% higher net operating income
(NOI) per square meter compared to non-certified office
buildings again reinforcing the importance blue chip
occupiers are placing on green office accommodation.
“Since the first green star certified building in 2009,
the Green Building Council SA and those certifying their
buildings, knew – almost instinctively – that it made
business sense to certify green. We spoke then of the
“Rands and Sense” of green buildings, with a lot of the
business savvy couched within the lower utility bills,
healthier buildings and highly productive occupants. The
last six years’ worth of the MSCI SA Green Property Index
results has moved the conversation to that of NOI and
Capital Value. The conversation is not only about bottomline
savings, but about investment – “Rands and Sense” to
Value of Green,” says GBCSA CEO, Lisa Reynolds.
Cashflows deemed lower risk
Green certified offices boasted significantly lower per
square meter usage of electricity (-11.6%) and water (-20.7%)
when compared to non-certified offices. With administered
costs rising at rates in excess of inflation, these costs can
have a significant impact on performance over the lifecycle
of a property. As a result, the green-certified office sample
had a 50bp lower discount rate when compared to the
non-certified sample, implying that its future cashflows
were deemed lower risk.
Better across all measures
Released in April 2022, the MSCI South Africa Green
Annual Property Index demonstrated the link between
green-certified buildings and investment performance but
also of its lower vacancy rate, lower operating cost, higher
net operating income and lower discount rate.
“In an extremely tough office market, it is encouraging to
see that green certified buildings continue to outperform
non-certified buildings. Not just because the perceived
risk in the income stream is lower but is also underpinned
by better property fundamentals – vacancies are lower
and margins are higher. Certification provides a proven
tool for asset managers to leverage off giving investors an
enhanced return,” says Eileen Andrew, Vice President:
Client Coverage at MSCI South Africa.
Comparison of Green Star Certified Buildings vs
Non-Certified Buildings in 2021
Certified
Total Return (%) 2.2 0.5
Vacancy Rate (%) 15.6 16.3
Net Operating Income
144 111
(per square meter)
Capital Value (per square meter) 20,998 16,226
Total Operating Cost %
35.6 39.8
of Gross Income
Water Usage
0.5 0.7
(m3 per annum)
Electricity Usage
(kWh per annum)
138 156
Non-certified
GBCSA RELOCATES
ZUTARI OFFERS ITS EXPERTISE FOR EPCs
To assist its clients to comply with the new EPC requirements,
leading consulting engineering and infrastructure advisory firm
Zutari is offering its experience in this regard, says Yovka Raytcheva-
Schaap, Associate, Environmentally Sustainable Design (ESD)
Consulting & Project Management. Zutari offers both upstream
and downstream assistance with the EPC process.
The winner of the 2021 Corobrik Student Architecture
Awards was announced on 8 June at a special event at
the Radisson RED in Rosebank, Johannesburg. The
35th national awards ceremony was unique in that
all seven regional winners and the heads of school
from their respective universities, together with
leaders from the architectural fraternity, were in
attendance in person for the first time since the
Covid-19 pandemic.
The 2021 national winner, announced live, was Mpho
Sephelane from the School of Architecture at the University
of Cape Town, who received a R70 000 cash prize. A
special prize for the best use of clay face brick in a project
was awarded to Wian Jordaan from the Department of
Architecture at the University of Pretoria. An overwhelming
GBCSA has moved to new green offices in Cape Town at
Growthpoint Properties’ River Park, Mowbray. The GBCSA
has taken a three-year lease over some 330sqm of space
at the recently refurbished multitenant office building.
River Park recently improved its green rating to a GBCSA
5-Star Green Star SA – Existing Building Performance v1
certification. The building has high scores for its land use and
ecology, green transport access, and energy and water savings.
Lisa Reynolds, CEO of GBCSA, says a green building
rating was a prerequisite for the council’s choice of offices,
but it also had several other rigorous requirements. On
top of walking the talk by working from a certified green
building, cost-effectiveness was key. The GBCSA also sought
an inspiring workspace in a good location with excellent
accessibility for visitors. The office is near GBCSA’s former
offices so staff travel would not be affected by the move and,
thus, did not increase their carbon footprint.
WINNER OF 35TH COROBRIK STUDENT ARCHITECTURE AWARDS
Yovka Raytcheva-Schaap,
Associate, ESD Consulting and
Project Management, Zutari.
four of the seven regional winners used face brick in their
projects, including Sephelane.
The seven regional winners presented their theses to an
esteemed panel of judges in a Johannesburg studio during
May, from where the final winner was selected. The judges
were Ludwig Hansen from Ludwig Hansen Architects +
Urban Designers, Rahdia Parker from Archi Cape Town,
and Adwoa Agyei, Director: Physical Development Services
at the City of Tshwane.
“I can only agree with the sentiment that we as judges
were impressed by the quality of the submissions. There are
actually seven winners here. It has been an honour from our
side to be part of the awards,” said Hansen.
TO VIEW WINNING PROJECTS
The seven finalists at the 35th Corobrik Student Architecture Awards with
Corobrik CEO Nick Booth and Chairman Peter du Trevou.
14 POSITIVE IMPACT ISSUE 18
POSITIVE IMPACT ISSUE 18
15