The Singapore government has set a new norm for the city-state: By 2030, it is said that the government has targeted at least 80 per cent of all buildings to be certified green by the Building & Construction Authority (BCA). Most of the green office buildings are to be constructed in Singapore’s central business district.
To date, the number of green buildings in Singapore has soared tremendously from 17 to more than 2,500 ever since the BCA Green Mark scheme began in 2005. This is equivalent to more than 70 million square metres of gross floor area (GFA), or nearly 29 per cent of the total GFA.
There’s strong commitment in pursuing green office space from the financial services sector. Explained by Sumit Argarwal, professor at the National University of Singapore (NUS) School of Business, tax subsidies can also be claimed by MNCs in their home countries in Europe and the US – the two regions that advocate environment friendly corporations. However, it is difficult to determine if green buildings command a rental premium over their non-green peers because of their “Green-ness”.
Small and medium-sized enterprises (SMEs), however, may continue to be relatively slow to jump into green office spaces. This is due to the fact that these businesses (with comparatively thin profit margins and more cost sensitivity) have no say about staying put in older, non-central, non-green buildings which charge lower rents – not so much because these spaces are not green, but because they are old.
To emphasize on this, the Green Mark commercial buildings tend to be the prime Grade A offices, and therefore the rentals are higher. Henceforth, SMEs would not pay for higher rent without reason, as stated by Yu Shi-Ming, associate professor at the NUS School of Design & Environment.
According to Tim Shen, the CBRE director sustainability Asia, more companies are asking about green options when it comes to leasing new space and are therefore factoring the green option into their decision making process. He said that green buildings have already become an industry expectation in advanced markets while it is almost impossible for the international office buildings to construct without achieving a green building certification of some kind.
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