How Building Certifications Add Value to Assets

Building certifications often come across as complex and tedious, but their true value goes far beyond ticking boxes. This article aims to provide a brief overview of how building certifications can add value to an asset and how main contractors should use them to improve both the performance of the building and the impact of the project as a whole.

It is a common conception that BREEAM, WELL, LEED and any of the other seemingly endless quantity of acronym-based certification schemes (over 40 of them in total) prove as merely tick-box exercises which are pulled together at the end of a project to achieve a certificate. And this may be the reality in some instances. However, the market is changing, we are seeing an increase in building owners and developers requiring best-in-class sustainability credentials for their projects. There are multiple reasons for this, but in my opinion, it is led predominantly by increased awareness of climate change and employees' higher standards of employers for suitable working environments.

This, in turn, gives business owners no choice but to provide their employees with a considered office space that puts sustainability at the forefront. As a result, premiums can be charged for properties that demonstrate their commitment. Building certifications are the tangible outcome that demonstrates this to the market.

The BRE quoted that due to their certification (BREEAM), 11% of projects saw a high premium on their rental value, and 68% of projects saw a moderate or low premium. JLL then quantified this premium as a 20.6% capital value increase on the asset.

The International WELL Building Institute (IWBI) similarly boasts increased tenants’ satisfaction with their office spaces post-certification. It mentions that 18% are more satisfied with access to sunlight, 17% are more satisfied with acoustic privacy, and multiple references to a reduction in absenteeism and other wellbeing metrics (4).

The evidence shows that certificates can add economic value to the landlord and social value to the tenants, but can they also positively impact the main contractors' ability to build more responsibly?

As a contractor who takes on the project at stage 3 or 4 with little input into the overall design philosophy of a project, more generalist certifications – like those above - do not incentivise a contractor to propose new and innovative changes to the specification. Therefore, building certifications that do not work on a ‘credit’ system can be ticked off, but instead, a scaled approach where performance is not binary. Examples of this would be the NABERS performance standard and carbon assessments, among others. Then, when the end result of these assessments is included as a key performance indicator for the project, it changes the mindset of the main contractor entirely, from one who delivers the bare minimum to one who will become much more engaged in sustainability.

This method of assessment encourages continuous improvement, it allows contractors to make their own mark on a project, interrogate the design, and propose innovative solutions to improve the performance of the building.

It is worth noting here that for this to be successful, the correct reporting and due diligence must be done by the client, as with any certification, there needs to be third-party verification to allow for comparability between projects.

To conclude, green building certifications can certainly add value to a project and a building, the extent to which the main contractor can contribute to this is dependent on the type of certification that is chosen. To get maximum value, the market will need to begin to recognise carbon and NABERS assessments in the same way it currently does for WELL and BREEAM. Once the market rates reflect these certifications, developers will be able to incentivise contractors by rewarding main contractors who perform better in carbon emissions and operational efficiency ratings—leading to a continual feedback loop of financial and carbon benefits within our building stock.

Authored by Matt Robinson, Head of Sustainability.

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