Does size matter? Findings on the Green building cost premium in South Africa for 2009 - 2018

Abstract

Since the Green Building Council South Africa (GBCSA) was established in 2007, the frequent perception that green building has a significant and unaffordable cost premium challenged the progress of green building. Various studies confirmed that this opinion exists worldwide. In response, the GBCSA, the Association of South African Quantity Surveyors (ASAQS) and the University of Pretoria (UP) started a joint study in 2014 to provide accurate data on the actual cost of South African green buildings. The study findings are based on the cost data of all new office buildings awarded a Green Star certification by the GBCSA using the Green Star Office v1/v1.1 rating tool. A total of 170 new office buildings fit this profile. The study findings were published in industry booklets in 2016, 2019 and 2022. In addition to reporting on the cost premium of green building, the aim of the study was also to consider prominent building features driving green building costs to develop a deeper understanding of the nature of green building cost. These building features include the certification level, the size, the base building cost, the certification date, the tenant mix and the vertical façade ratio of the buildings. The study found an average green building cost premium (GBCP) of only 3,96% in 2019, reducing to 3,63% in 2022. The study also found that the construction area of the study population’s buildings had a consistent negative correlation with their green building cost premium. This study will describe a more detailed relationship between building size and green building cost premium. The information will add value to the green building industry and all the relevant stakeholders, such as property owners and developers, the GBCSA, the ASAQS and the quantity surveying profession. The findings can also be compared internationally to serve the wider green building industry.

Keywords: Cost drivers, Cost premium, Green building, Quantity Surveyors, South Africa

DOI: 10.54941/ahfe1003086