The growing value of green buildings
Sustainable buildings have long been recognised for their positive environmental impact offering healthy, efficient, and productive spaces for occupants. However, recent research shows that green buildings can also present golden opportunities for building owners, developers, and investors. Certifications such as Green Star and the National Australian Built Environment Rating System New Zealand (NABERSNZ) are now proven to add significant financial value to properties, enhancing both rental and sale prices.
A healthy investment
After analysing the Auckland, Wellington, and Christchurch market, research reveals that buildings with sustainable credentials command higher rents and have increased market value. Properties certified by Green Star, Australasia’s largest voluntary sustainability rating system for non-residential buildings, consistently demand a sales premium. Buildings with a 4-star Green Star rating achieve a 3.7% premium, while those with a 6-star rating see an uplift of up
to 7.5%. Similarly, rental premiums increase from 1.5% for 4-star rated buildings to 2.25% for 6-star properties.
Occupants are attracted to the healthier, more energy-efficient environments that these buildings provide. This results in a green building’s ability to not only generate higher returns but also experience reduced vacancy rates, making it a savvy investment choice for developers
and investors.
Understanding Green Star certification
Green Star was developed by the Green Building Council Australia in 2003 and adapted for New Zealand by the New Zealand Green Building Council (NZGBC) in 2007. It assesses buildings across a spectrum of environmental criteria, including energy efficiency, water conservation, indoor environmental quality, sustainable materials, and waste management. The certification system rates buildings from 1 to 6 stars, with 6 stars representing world leadership
in sustainability.
Green Star certification is internationally recognised and has become a benchmark for sustainable design and construction practices, not only in New Zealand and Australia but also globally.
The role of NABERSNZ
NABERSNZ, New Zealand’s leading performance certification for office buildings, focuses on energy performance. Unlike Green Star, which evaluates both design and construction, NABERSNZ measures a building’s energy use once it has been occupied and operating for at least a year. It offers a rating system from 0 to 6 stars, providing a clear benchmark for how efficiently a building is using energy compared to similar properties.
NABERSNZ helps building owners, tenants, and property managers understand and improve energy consumption. By identifying areas where energy efficiency can be enhanced, businesses can reduce operational costs and improve the environmental performance of their buildings. As energy efficiency becomes an increasingly important factor in the real estate market, having a high NABERSNZ rating can significantly boost a property’s appeal.
Certified green, certified competitive
Green certifications such as Green Star and NABERSNZ are not just about environmental responsibility - they are key drivers of property value and market competitiveness. Buildings that achieve both Green Star certification and high NABERSNZ ratings experience higher rents, reduced vacancy rates, and greater overall market demand.
As sustainability becomes an ever-increasing priority in the real estate sector, pressure is mounting from both regulatory bodies and market demand for buildings that meet Environmental, Social and Governance (ESG) criteria. Green-certified buildings are well-positioned to thrive in this changing environment, making them a smart choice for investors looking to future-proof their assets.
The future is green
The real estate industry is facing increasing pressure to adopt sustainable practices. With rising regulatory requirements and global demand for green assets, there has never been a more important time to invest in sustainability. Green Star and NABERSNZ certifications provide a clear framework for achieving this, ensuring that buildings not only meet high environmental standards but also offer significant financial returns.
By embracing green building practices, property owners and investors can create assets that are not only environmentally responsible but also financially rewarding. In a competitive market, sustainability is becoming a key differentiator, and green-certified buildings are leading the way in shaping the future of the industry