Keenest to be greenest

There is clearly no lack of avowed enthusiasm for green projects among developers: “The green development concept reflects our company’s philosophy. It leads our corporate thinking from the start of the planning phase, so that environmentally friendly solutions are implemented throughout a project’s development as they are later in its management,” says Dániel Pazsitzky, the communications project manager at TriGranit Management Corporation. Others too emphasise the necessity for a comprehensive ecological approach beginning at the very start of a project: “For Echo Investment sustainable development policy is a process which starts at the design stage of a given project. This is mainly connected with the high standard and quality of the solutions applied. While designing a building we care not only for ecology, but also take into consideration the comfort of its future users. We look at the process on a long-term basis so as to make the building serve people for many years in an excellent condition,” says Igor Grabiwoda, the director of the team of architects of the office and hotel department at Echo Investment.

A certifiable requirement?
Indeed, sometimes it seems that green certification of some form has now become a de facto requirement when it comes to the commercialisation of any new development. “For all practical purposes, all new office developments today require certification. This trend has expanded across the region, although it has been slow to penetrate the smaller markets, such as Bratislava, Zagreb and Belgrade,” explains Michael Smithing, the director for green building certification for the CEE region at Colliers International. However, the actual certification bodies themselves stress that applying for green certification is a purely voluntary process. “LEED is a voluntary system, so there is no requirement for developers to pursue it. However, for those that choose to do so, there are demonstrable benefits. These include long-term building operation cost savings as well as competitive differentiation in the market, as an increasing number of consumers and tenants are actively choosing to do business with or lease space from organisations that have demonstrated their commitment to sustainability by securing LEED certification for their facilities,” explains Jacob Kriss, a media associate at the U.S. Green Building Council. Similarly, The Building Research Establishment (BRE), the British organisation behind the BREEAM certification scheme, sees no current necessity to apply for green certification, although it does admit that more developers are applying. “There is a definite increase in interest from developers, partly as a result of their desire to differentiate their offer and attract tenants. We are also seeing a growing interest from clients and occupiers who are specifying a BREEAM requirement as part of the corporate strategy. A number of developers are making a commitment to BREEAM throughout their whole European portfolio,” says Simon Guy, the head of sustainability marketing at BRE. However, Mieczysław Godzisz, the managing director of Hines Polska, believes that such certification is in practice becoming less and less optional and instead is becoming rather a necessity for new buildings. “In the future core investors will punish the vendor by paying less,” he claims in relation to uncertified buildings in the class ‘A’ office segment. Indeed, he believes the process has already begun (although not consciously) with investors cutting their valuations of “non-green” or non-certified buildings. But for Hines certification is no more than a first step. The proper asset and property management of buildings is more important when it comes to sustainability over time. Mr Godzisz uses as an example three cleaning ladies working at night in a multi-storey building. One might be vacuuming the floor, another might be taking out the rubbish and the third might be cleaning the toilets; but if they are all working on separate floors much of the building will be lit up unnecessarily all night. Changing behaviour is equally important when it comes to reducing a building’s carbon footprint as is the original certification. And this is also why (he claims) BREEAM In-Use or LEED for existing buildings may often be more difficult to obtain, especially in Poland. Many of the potential points under these systems accrue from the appropriate management of the building, which also includes the behaviour of the tenants. Developers and owners will have to educate tenants about the importance and benefits of sustainable behaviour, and so will need larger and experienced local teams to take on this “educational” task. A lot remains to be done in this respect.

Just a value thing?
The question arises whether developers are actively pursuing sustainability as a business aim or just reacting to the dictates of the market: “Developers do see the necessity of producing sustainable buildings, but only because certification has a positive impact on the building’s value. The buildings lease faster, have lower vacancy and are easier to sell – exactly the type of financial motivation that developers are so fond of,” claims Michael Smithing. Indeed, many of the developers themselves also stressed the importance of economic stimuli: “Sustainable development begins for us with drawing up a concept that is tailored to the property in question and makes the most ecological and economic sense,” explains Robert Bambach, the COO of Hochtief Projektentwicklung. As to whether high certification scores are sufficient to differentiate office buildings on the market, the answer does not appear to be clear cut. “For an office building offering over 20,000 sqm of leasable space, a LEED ‘Platinum’ certificate would add several million euro to its value,” claims Nicklas Lindberg, the president of Skanska Commercial Development Europe; but Michael Smithing from Colliers sees the situation somewhat differently: “As the absolute number of certified buildings available on the market is so small there is really not much scope for differentiation based on score,” he says. But as he admits: “I think most office agents realise that a BREEAM ‘Pass’ certification is not an indication of either high quality or sustainability.”

A plethora of certificates
A number of issues arose while compiling the ranking. Firstly, there was the issue of which certificates need to be included in the ranking. Since the majority of green certificates issued within the region are either LEED or BREEAM, these two certification systems are clearly required. But what about the German DGNB certificate and the French HQE certificate? The European Union has also joined in the game of offering green awards with its GreenBuilding certificate. The French certification system is the most easily dismissed, since it is the most recent certification to debut internationally and most of the buildings that have been registered under the system are in countries where French is spoken (for example, The Square in Luxembourg, developed by IVG). However, the DGNB certificate was included in our ranking, even though only one developer we surveyed possessed such a certificate (CA Immo for its Amazon Court building in Prague). Although this certification is clearly not as popular as either BREEAM or LEED, the relative scarcity of buildings registered under it can also be put down to the system’s relative novelty. DGNB was only launched as recently as 2008. The decision not to include the EU GreenBuilding certificate might seem a little more controversial. Several companies have received GreenBuilding certificates for a number of buildings, such as Globe Trade Centre for its Centrum Biurowe Francuska in Katowice and its University Business Park in Łódź. However, the remit of the GreenBuilding certificate is too narrow. According to Paolo Bertoldi, an energy efficiency expert on the European Commission, it is a register of buildings with an energy consumption of at least 25 pct less than the legal norms that apply in any given country. There is also a GreenBuilding certificate for existing buildings, which is awarded when energy consumption is cut by 25 pct after renovations. But it has no grades and considers no other criteria than energy consumption.

‘Platinum’ versus ‘Outstanding’
Another problem is the difficulty in comparing standards. There are a number of LEED certificates in our survey with the highest grade of ‘Platinum’ (albeit for ‘Core & Shell’), and yet only one building has achieved the highest ‘Outstanding’ ranking for BREEAM. The Spielberk Tower, part of the Spielberk Office Centre in Brno, was developed by CTP Invest and is indeed the first building outside the UK to be awarded such a grade. When asked why the company decided to target this grade, Thomas A. Kostelac, the marketing director at CTP, explained that: “CTP prides itself on developing premier properties, built to the highest specifications, and our company culture is one that sets high standards for ourselves. So for the Spielberk Tower it was natural for CTP to attempt to reach the highest possible certification level we could.” When it was put to him that such a grade might add significantly to the development costs, he responded: “Well, yes and no. Initially, yes; it is more costly, but over the long term the initial investment in a higher quality building will provide lower running costs over its lifetime. Energy efficient buildings have become a top priority for our clients, and some tenants are required, as part of their corporate responsibility efforts, to only occupy buildings with a high certification level.” This leads to a further difficulty in the comparison of standards. There are a number of BREEAM and LEED certificates available for certifying various stages of the development process. Should all such certificates be taken into account? Skanska’s office interior in Warsaw is LEED certified at the ‘Silver’ level, but we left this out of our survey. However, we have counted the LEED ‘Core & Shell’, which is awarded before a building can become pre-certified. Pre-certification itself is, claims David Pettersson, the development director of SwedeCentre, “mainly used for marketing purposes to show possible future tenants that the building will achieve the targeted level of LEED certification.” He also points out that “pre-certification does not mean that the building will be granted final certification.” There are also questions as to whether the number of certificates is a true measure of a company’s commitment to ecological sustainability. SwedeCenter has one LEED ‘Gold’ pre-certified building. Yet this says nothing about its other projects (such as Business Garden Warsaw and Business Garden Wrocław), which are all currently undergoing certification. Hines declined our invitation to take part in the ranking, explaining that the company was currently in the process of collecting the documentation required for BREEAM for a number of projects and the company was originally very reluctant to contribute to this article because, as Magdalena Michalak, the company’s marketing manager explained, the number of certificates awarded to Hines “won’t gauge our real approach to sustainability.” Additionally, the ranking takes no account of the total number of buildings in each company’s portfolio.

And the winners are...
Considering that the ranking needs to be taken with a pinch of salt, what does it actually reveal? Well, it appears that Skanska’s green reputation is not just marketing bravado. The company’s large number of LEED ‘Platinum’ certificates does actually back up its claims to be committed to sustainability. “Sustainability for us is simply running a smart business. At Skanska we truly and honestly believe we need to leave this planet in the best condition we can for future generations. This is the leitmotif behind everything we do,” declares Skanska’s Nicklas Lindberg. Ghelamco also came particularly high in the ranking. Indeed, the company recently announced the BREEAM certification of its T-Mobile Office Park at the ‘Excellent’ level – the first office building in Poland to achieve such a grade. “Sustainable development has been one of the crucial elements of our company strategy for a long time. We attach great importance to the quality and the technical and environmental standards of our buildings, using the latest achievements in this field to create the most pleasant working environments and the best work/life balance. When designing a new building we always look at it through the eyes of the final users – our tenants, and we strive to adjust the project to their needs,” explains Jeroen van der Toolen, the managing director for the CEE region of Ghelamco. Whatever flaws the ranking might have, perhaps we can actually say that these are the two greenest real estate companies in the CEE region.