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24 | International investment
of construction material, including the mechani-
cal and electrical plant equipment, thermal insu-
lation of the windows and walls. The type of
space and water heating units available is also
From 2009 onwards all buildings
measured.
In addition, all public buildings in the UK bought, sold and let within the
(and also in some other parts of the EU) are
expected to have Display Energy Certificates.
DECs, based on evidence from the last year,
European Union are expected to have
measures how much energy a particular building
has consumed. an Energy Performance Certificate
By producing a coloured bar code of efficiency
(or inefficiency) and displaying the same by the
entrance of the building, the building occupier is transport to and from that building; and the associated with this agenda (as set out above), it
made aware of how efficient or otherwise he demolition (involved recycling and disposing of will not go away.
might be in its use of the building. toxic waste material). Increasingly occupiers and investors will have
As the latest King Sturge report “European All the current benchmarks almost totally to take on board legal and other changes and
Property Sustainability Matters – benchmark ignore this three-stage life-cycle carbon footprint think about “future proofing” their investment
tools and legal requirements” states, across the assessment. holdings. An empty building with a poor Energy
world there is now a plethora of different types Furthermore, the UK Government recently Performance Certificate may be even less lettable,
of benchmarks and certificates. In the UK commissioned a study to calculate the additional especially in this difficult market. However a well
BREEAM (Building Research Establishment cost of obtaining Code 6 if a building was built let building, with a good Energy Performance
Environment Assessment Methods) has recently to the new Code for Sustainable Homes. It is Certificate, may have far higher capital value.
been upgraded to bring it more in line with suggested that up to 40% additional costs or But as former President Ronald Regan
Energy Performance Certificates. The UK has more would be needed to meet this onerous car- famously said; “you ain’t see nothing yet”. As
also introduced the Code for Sustainable Homes bon efficient standard. Therein lies the dilemma; President Barack Obama stated in his Inaugural
whereby new development is rated from a scale at a time when property and land values have Address on January 20 2009, “Each day brings
of 1 through to 6. Code 6 is meant to be zero collapsed in value, can the industry afford to pay further evidence that the ways we use energy
carbon. yet more costs to save carbon dioxide? strengthen our adversaries and threatens our
Across the European Union there have been a planet…… We will harness the sun and the
Environmental assessment variety of attempts to introduce carbon efficient winds and the soil to fuel our cars and run our
In Hong Kong the BEAM building environment buildings. For instance, countries such as factories…”
assessment method is used. In Japan they have Denmark and Germany have had mandatory The European Union is currently putting in
CASBEE and in Germany DGNB-Seal. Australia benchmarks in place for more than five years. place its next Energy Performance Directive. The
is arguably further ahead than Europe and has a Other countries such as Greece and Slovenia concept is that all buildings from 2010 onwards
Green Star certification process, whilst France have only begun to introduce certification this will require a certificate when renovated. The
has an indication benchmark called HQE. Italy current calendar year. Many Scandinavian coun- objective is to cut green house gases by 20% by
likewise has a protocol ITACA and in America, tries such as Sweden introduced stringent energy 2020. The Commission aims to set down, “a
LEED (Leadership in Energy and Environmental targets back in the 1980s. comparative methodology for calculating cost
Design) has taken route and has become an One the challenges for the “sustainable agen- optimum levels of minimum energy perform-
important part of the construction industry. da”, is to have a clear picture as to what we mean ance.”
by “sustainable”. The traditional route is to think All members should then bring forward plans
Not only is there total confusion, especially if of three concepts; Environmental, Social and by 2011 with reviews every three years thereafter
you are international investor, as to what all these Economic Sustainability. To make all three hap- to make sure they are being implemented appro-
different certificates and benchmarks mean, there pen, Governance is paramount. In others words, priately.
is also a growing awareness that they may be, to if there is no legal and political infrastructure in In addition, the European Union is likely to
some extent, bureaucratic nonsense. place, which not only sets a target but manages introduce a Water Directive. This will set down
The key question is; will they save energy and those targets over many decades, little will be minimum standards for each building against
the planet? It is doubtful whether having an achieved. which to judge water usage and re-usage in terms
Energy Performance Certificate Grade C or bet- One of the dilemmas in a democratic system of achieving sustainability. The use or miss use of
ter means much more than the building is well of Government is that of political change. Many grey waste water is as important as using up fresh
constructed. How the building is used is not well meaning Ministers of State in all EU coun- water.
measured! tries come and go year-by-year (and sometimes Preparing for this future agenda will mean
Furthermore, if the building has been con- month-by-month). In the UK, an analysis of the meeting both targets; reducing the use of energy
structed and in use for more than a century last 30 years reveals that, there have been more (much of which, as President Obama states,
(which is the case for many buildings across than 16 Secretaries of State responsible for Town comes from less politically stable parts of the
Europe), and it has an F or G rating, the question Planning and Energy matters. In other words, no world than Europe) and reducing the impact on
arises “so what”? Is the introduction of Energy Minister has been round more than a year or two the climate.
Performance Certificates simple costly well before another well meaning individual has taken A more sustainable future is envisaged,
meaning bureaucracy? over. The inconsistency of the political structure despite some of the rather bureaucratic bench-
We all know that there are three major energy is at variance with the concept of long term sus- marks and legal requirements currently being
stages to the life cycle of any building; the con- tainability. implemented. Retro-fitting older buildings, to
struction (obtaining and designing a building The outlook for the investment market sug- meet these ever increasing targets, will become
efficiently); the use in terms of energy/waste and gests that, whilst there are a number of problems paramount.
May 2009 Investment International www.investmentinternational.com
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