Tag: Growthpoint Properties

Fluxmans signs with Growthpoint for Illovo Corner offices

Leading South African law firm Fluxmans has signed a long lease with Growthpoint Properties (JSE: GRT) for a 4,600sqm office in Illovo Corner, Illovo Boulevard, Johannesburg.

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GBCSA relocates to Growthpoint’s River Park offices in Cape Town

Green Building Council South Africa (GBCSA) is moving to new green offices in Cape Town at Growthpoint Properties’ River Park, Mowbray, from 1 June 2022. The GBCSA has taken a three-year lease over some 330sqm of space at the recently refurbished multitenant office building. 

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Growth in point: emission-free power with Tesla Model X and 144 Oxford

A Growthpoint and Rubicon collaboration

Tesla Model X and 144 Oxford have joined forces to drive home the concrete environmental advantages of renewable energy at green buildings.

The high-impact initiative is a collaboration between green building leader Growthpoint Properties, which developed and owns the 144 Oxford offices in Rosebank, Johannesburg, and sustainable technology company Rubicon Group, which brought the first Tesla Model X Performance Edition all-electric SUV into the country to raise the profile of renewable energy.

Electric cars rely on charging from the local electricity network. At last count, around 90% of South Africa’s electricity was produced from coal and it was ranked among the top 15 emitters of greenhouse gases globally. The country’s fossil-fuel-dependent power grid that supplies most buildings is far from emission-free.

But 144 Oxford has a rooftop solar plant. The concept of generating renewable energy for electric vehicles results in true “zero-emissions” operation. In this case, the blending of the solar-powered green building at 144 Oxford and the Tesla Model X all-electric vehicle produces the best possible environmental outcomes – no carbon dioxide emissions, improving urban air quality, moving away from non-renewable fossil-fuel power and shrinking carbon footprints.

Setting an ambitious target for a South African property company, considering electricity purchased from Eskom and municipalities to service its buildings counts towards its emissions, Growthpoint’s leadership has committed to a Carbon Neutral 2050 target.

Estienne de Klerk, CEO of Growthpoint Properties SA, comments, “Environmental sustainability is at the core of our business at Growthpoint. This work is challenging and exciting and we love what we do. For more than a decade, Growthpoint has been at the forefront of the movement towards greener buildings and has built a reputation as a leader and innovator in this space. Protecting the natural environment is a critical component of our clearly defined ESG strategy which influences our performance for all our stakeholders. We want to do better in this regard and have set targets for all Growthpoint’s corporate offices to operate at net-zero carbon by 2030. We also expect several of our portfolio buildings to achieve net-zero carbon by this time because we are already working towards having all Growthpoint buildings to achieve the target by 2050.”

To meet this target, Growthpoint is driving two key strategic initiatives. It is reducing the energy consumption and associated emissions of its buildings by ensuring they are energy efficient and having this externally certified. It is also introducing additional renewable energy to its property portfolio by installing more solar plants at its buildings.

As a case in point, the newly developed 144 Oxford exemplifies Growthpoint’s green building commitment and has achieved a 5-Star SA Green Rating by the Green Building Council of South Africa. All green-certified buildings are energy efficient, and its rooftop solar installation, which adds renewable power to the building’s energy mix, made a significant contribution towards its rating. 144 Oxford has been chosen by Growthpoint to pursue net-zero carbon building certification.

Growthpoint’s transformative approach to green building is revolutionising commercial buildings in South Africa. Growthpoint owns the biggest portfolio of Green Star-rated buildings in the country and continues to find ways to improve its existing buildings’ green performance and ensure that it maintains these standards over time. It was a Growthpoint development and asset that became the first building in Africa to be rated according to the International WELL Building Institute’s Core and Shell Building Standards, which is the first rating system to focus exclusively on the impact of buildings on human health and wellness.

As part of its environmental commitment, Growthpoint has long invested in renewable energy, and it plans to grow this investment. Rubicon has proven to be a trusted partner in achieving greener buildings with better environmental impacts.

“The energy and e-mobility divisions are exciting and dynamic segments of our business,” says Rubicon Group’s director of Energy & E-Mobility, Greg Blandford. Our focus is to accelerate the adoption of renewable energy sources. It is an exciting space to be involved in, and we are very pleased to form a part of that value chain along with partners such as Growthpoint.”

For South Africa’s biggest real estate investment trust (REIT), solar power is an exciting opportunity and a strong business case with an average return on investment of four to five years. By 2020, it had already installed 7.5MW of renewable energy across its portfolio. As it accelerates its steps to reduce carbon emissions on its journey to carbon neutrality, Growthpoint is confident it will attain 20MW solar power by the end of FY22. By 2026, it intends to increase this to 46MW.

The announcement that companies can now invest in solar plants of up to 100MW without the need for a generation license from the national regulator has further fuelled Growthpoint’s enthusiasm towards renewable energy adding financial viability to our Carbon Neutral 2050 commitment.

“Our innovative collaboration with Rubicon’s Tesla Model X at 144 Oxford demonstrates that buildings are where the rubber hits the road on the journey to carbon reduction. It highlights the direct impacts that a building’s power source can have on reducing carbon emissions, and leaves no doubt that green energy and green building are the future,” says Head of Sustainability and Utilities at Growthpoint Properties, Grahame Cruickshanks.

“With the increasing threat of climate change due to the emissions of greenhouse gases, it’s necessary to explore greener solutions, such as moving to electric vehicles which are, on balance, better for the environment. By providing electric vehicle charging stations at buildings in our portfolio where there is demand, particularly our shopping centres, and ensuring that buildings such as 144 Oxford are future-proofed for charging stations, Growthpoint is meeting the mounting demand for electric vehicle charging in SA. And, in many instances, making it possible for more people to plug into a greener grid thanks to solar power in a growing number of our buildings. This also creates awareness about and demand for alternative and environmental-friendly transport,” adds Cruickshanks.

Growthpoint’s ongoing investment in green energy and green buildings will continue reducing greenhouse gas emissions, creating energy and water efficiency and cost savings, extending the lifecycle of assets, lowering tenant costs and ensuring continuity of power supply to its buildings.

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AECOM fulfils key QS role at Exxaro building to assist with green rating

Sustainable buildings not only benefit the occupants, but also achieve a lower cost of occupancy for clients, while at the same time having a positive impact on the environment. Tenants are now much more aware of the benefits of occupying green buildings, which in turn makes leases more attractive. A healthy lifestyle is not only a priority for modern society, but has become a norm rather than a ‘nice to have’ for medium-to-large corporates in the wake of the Covid-19 pandemic.

An example of this trend is the new Exxaro head office in Centurion by leading developer Growthpoint Properties. “The development manager on the Lakeside project took a very personal approach to achieving Green Star accreditation and wanted the Exxaro building to be a first of its kind. Growthpoint has a strong focus on building sustainable green-rated buildings, with a large emphasis on the health and well-being of its tenants,” explains Kristina Moodley, Associate Quantity Surveyor, Cost Management, Buildings + Places at AECOM.

The iconic project is one of only a handful of buildings in South Africa to boast an As-Built 6 Star Green Star rating from the Green Building Council of South Africa (GBCSA), the highest level of sustainability accreditation in the country. It is also the first building in South Africa to achieve Silver Level WELL certification for Core and Shell by the International WELL Building Institute (IWBI). The Exxaro head office won the AfriSam Innovation Award for Sustainable Construction at the Construction World Best Projects Awards 2019 and was Highly Commended in the Consulting Engineering Category. It also won in the Projects Greater Than R250 million category at the 2012 CESA Aon Engineering Excellence Awards.

AECOM was actively involved in assisting the green consultant with its budget calculations on the different points strategies required to result in achieving 4, 5 and 6 Star Green Star and WELL ratings respectively. “We are hands-on, constantly managing, monitoring and aligning the construction costs against the budget when implementing Green Star specific initiatives via the main contract and report to the client on a monthly basis,” elaborates Moodley. The premier consulting firm was also part of the Green Star submission process and had to provide QS reports that evaluated and quantified the data used by the GBCSA to ultimately assess the building’s compliance against Green Star point targets.

“From a QS perspective, our experience with green buildings positioned us well in bid submissions, which now expressly call for previous Green Star project exposure as a prequalification criterion. We have successfully built up a substantial portfolio, having had the opportunity to execute projects for esteemed clients such as Growthpoint, Abland and Eris Properties, to name but a few. This has strengthened our already prominent footprint in the QS field. The exposure has given us undeniable and invaluable knowledge to financially manage the most complex of projects successfully,” comments Moodley.

The AECOM team was pivotal in unlocking the project, providing a financial blueprint which balanced the Class 8 dolomitic ground conditions together with various site constraints, market rentals and client aspirations in terms of ‘green’ accreditations and return on investment, enabling the team to deliver a cost-effective, world-class project. Sustainable practices that were incorporated included stormwater attenuation and filtration.

A rainwater system collects water and feeds it into the stormwater filtration system. This water is recycled and re-used by the building for irrigation and sanitary flushing. Leak detection is incorporated in all systems involving the flow of water, such as soil drainage, water supply and stormwater attenuation. These detection methods link back to the Building Management System (BMS), which alerts facilities management of any leaks that may occur, thereby saving on water consumption while complying with dolomitic restrictions.

Looking at the impact of Covid-19 on the property development sector, Moodley points out that large corporates still require expansive office space. However, those who have adapted to working remotely will follow the trend of smaller hot desk workspace setups. AECOM’s QS offering, in particular, specialises in commercial fit-outs.

“AECOM quantity surveyors have the expertise, knowledge and proven track record in unlocking developments for clients across the various commercial, residential, industrial and infrastructure sectors. We pride ourselves in working closely with our clients in making their vision a reality,” concludes Moodley.

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Certified green offices: Resilient to tough rental market

In its fourth year, the MSCI South Africa Green Annual Property Index provides an independent and consistent comparative return on investment for green-certified and non-certified offices.

Released in conjunction with Green Building Council South Africa (GBCSA) and sponsored by Growthpoint Properties, the MSCI South Africa Green Annual Property Index measures investment returns for a total of 293 prime and A-grade offices (R54.5 billion capital value) and compares the returns of 105 green-certified buildings (R26.9 billion capital value) to the returns of the remaining 188 non-certified constituents.

For the year ended December 2019, the green-certified office sample delivered a total return of 7.6% versus 5.1% of the non-certified sample. 

Growthpoint’s Head of Asset Management Office, Paul Kollenberg, explains that the findings of the MSCI Green Property Index for Offices strongly support their long-term office investment strategy.

“We believe that the design and operation of buildings with a focus on occupant health and wellbeing will come into even sharper focus, and the index is proof that green buildings that prioritise health factors such as good ventilation and air quality are extremely well-positioned to retain and attract tenants now and in the future.”

Paul Kollenberg, GROWTHPOINT

GROWING GREEN

Capital growth was the main driver of this outperformance as the green-certified sample held its value in a challenging operating environment for the office market. While the green-certified sample delivered capital growth of -0.8% the non-certified sample saw capital growth slow to -3.3%.

The superior capital growth was the result of better net income growth and a lower discount rate – meaning that valuers view green-certified office properties as a lower risk investment. Also telling was a significantly lower vacancy rate of 8.0% versus the non-green sample vacancy rate of 11.5% highlighting the value occupiers attach to green-certified premises.

RESULTS RENEW REASON

Released by MSCI in June 2020, the index results reinforce the association between quality and green-certified buildings, as reflected by a 34% higher capital value per square metre, more resilient capital growth, and a higher net operating income per square metre compared to the non-certified office buildings.

Vice President of Client Coverage at MSCI South Africa, Eileen Andrew, explains that the latest SA Green Property Index results have added to the growing body of evidence regarding the benefits of sustainable investing.

“It has been encouraging to see how green-certified buildings have outperformed on the key investment metrics of occupancy, net operating income, and operating cost ratios, highlighting these asset’s defensiveness during tough times. Furthermore, it has been interesting to note the discount and cap rate spreads between green-certified and non-certified assets, perhaps showing that valuers are adjusting their relative long-term risk assumptions for green-certified buildings.”  

EILEEN ANDREW, MSCI SOUTH AFRICA

Findings from the analysis showed that capital expenditure stood at 0.7% of the capital value for Green Star certified buildings, versus 1.2% of the capital value for uncertified buildings. This means that green-certified buildings require comparatively less capital expenditure, which has enhanced the capital growth relative to the non-green sample. 

GBCSA Head of Technical, Georgina Smit, comments that it is encouraging to see the research and evidence that backs certified green buildings as a worthy investment. 

“We expect that the value of certified green buildings will become even more pronounced as we navigate through the current challenges presented by Covid-19. With the greater focus on healthier environments, green buildings become even more attractive as they have always concentrated on health as the wellbeing of tenants, as well as operating cost efficiencies.”  

Georgina smit, green building council south africa

Smit adds that GBCSA has initiated globally leading independent research on the financial impacts of green buildings. The results from this year’s MSCI Green Property Index are particularly significant from a capital investment perspective, given the Covid-19 related impact on the property sector. 

Growthpoint is an established leader in commercial green developments across South Africa and internationally. The company provides spaces that work best for its clients by owning and managing the biggest portfolio of green-certified buildings in Africa and the results of the MSCI Green Property Index for Offices demonstrate the real rewards of doing this.

“Growthpoint creates space to thrive with innovative and sustainable property solutions in our portfolio of highly efficient office buildings, which support a lower cost of occupancy for clients, a lighter impact on the environment and rewarding returns for investors.”

PAUL KOLLENBERG, GROWTHPOINT

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