MARKET FORCES

MARKET FORCES

SA’s green-building sector has continued to attract investment amid the COVID-related downturn in the local property market.

In the latest MSCI South Africa Green Annual Property Index (which is sponsored by Growthpoint Properties), green-certified offices outperformed their non-certified counterparts in 2020. The index sample comprises 289 prime and A-grade office properties, valued at R54.5 billion, of which 139 were green-certified buildings. ‘The index’s findings continue to strongly support the case for investing in green-certified buildings,’ says Paul Kollenberg, Growthpoint head of asset management: office, who adds that the index also provides proof that ‘these buildings are better placed to retain and attract tenants and are cheaper to operate’. Green-certified offices are deemed lower risk as the sample saw a smaller decline in net operating income and a lower discount rate compared to non-certified units.

Georgina Smit, technical head of the GBCSA, says these results emphasise the positive role that certified spaces can play within the responsible investing context. ‘For investors, these results indicate that certified green buildings are attractive investment options as well as ensuring future climate resilience and delivering on mitigation interventions associated with green-building design and operation.’

According to Knight Frank researcher Tilda Mwai, the move towards ESG investing ‘isn’t just occurring at a global level, but in Africa as well’. She adds that the continent is currently home to more than 700 green buildings, a figure that is expected to increase by 50% over the next five years. Bloomberg reports that SA accounts for more than three-quarters of these buildings, and that other highly ranked nations include Egypt, Kenya, Senegal and Nigeria.

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