© 2016 - Qatar Green Building Council, All rights reserved

13th November 2016

I S T H E R E A C O ST P R E M I U M F O R G R E E N B U I L D I N G S ?

B.E., MBA, CEng. FIEI, CEnv. MIEMA, GSAS CGP, LEED AP(BD&C), PQPPrincipal Sustainability Consultant

dmckenna@hilsonmoran.comHilson Moran Qatar LLC, PO 12929, Doha Qatar

D a v i d M c K e n n a

e n v i r o n m e n t s f o r l i f e

• Analyse costs and benefits of Green Building (GB) rating systems in Qatar context

• Advise how to minimise the GB cost premium while maximising benefits

• Highlight how to avoid potential pitfalls and other factors leading to above normal costs

• Analyse case studies in sustainable development from Qatar

• Make recommendations for how GB rating schemes to guide future developments

Qatar’s Green Building Policies (2006-2016)

• Qatar National Vision 2030, issued 2008: Qatar National Development Strategy Qatar National Masterplan

• QGBC formed by decree in 2009

• GORD established GSAS rating systems in 2009

• Building Permit System

• Qatar Construction Specifications

Qatar’s Green Building Policies (2016-2026)

Sustainable Design & Construction

QCS

GSAS/ LEED

Building Permit System

• Coming soon - Qatar National Development Strategy, 2017-2021

Green Buildings in Qatar to dateLEED® by USGBC

BD&C Building Design &

Construction

ID&CInterior Design &

Construction

EB:O&MExisting Buildings:

Operations & Maintenance

NDNeighborhood Development

Homes

New Construction Commercial Interiors Existing Buildings: Operations & Maintenance

Neighborhood Development Plan

Homes

Core & Shell Retail Schools Neighborhood Development Plan

Mid-Rise

Schools Hospitality RetailRetail HospitalityHospitality Data CentersData Centers Warehouses & Distribution

CentersWarehouses & Distribution CentersHealthcare

LEEDv4 Rating Schemes

• Leadership in Energy & Environmental Design (LEED)

• Adopted mainly in Qatar Foundation affiliated projects:

• By 2012 Qatar was fifth in terms of registered projects outside the US

• Slow uptake in LEEDv4 registrations

Green Buildings in Qatar to dateGSAS® by GORD

Construction Management

Standard Building Typologies (BT)

Districts & Infrastructure (D&I)

Healthcare Railways Sports Construction Management (CM)

Commercial Neighbourhood Healthcare Railways Sports Construction Management

Single Residential SportsGroup Residential HealthcareEducation IndustrialMosques EntertainmentHotels EducationLight Industry TransportationWorkers Accommodation Parks

GSAS Rating Schemes

Design & Build

• Global Sustainability Assessment System

• Mandatory for public sector and certain mega development projects

• Endorsed by the Qatar Construction Specifications

• QCS2014 falls short of requiring actual GSAS certification

International studies on Green Building Cost Premiums

World GBC found GB Cost Premiums tend to decrease over time

2013, World GBC Report, “The business case for Green Buildings”

Factors leading to reductions in GB Cost Premiums

• Stricter codes

• Streamlined processes

• Better platforms for IDP

• Acceptance of modelling software

• Availability of experienced staff

• Better planning

• Proliferation of eco-labelled products.

Analysis of GB Cost Premiums and Benefits: LEED & GSAS Case Studies

Included QARGSASgate Registration (2 yrs) a 2,000 Precertification Review Split Review : Design (5,000 plus QR5 per sq.m) a 105,000 Split Review : Construction PI CDA (15,000 per visit) a 60,000 Appeals

167,000

GSAS Commercial Building (20,000m2)

Totals

Assuming a 20,000m2 GFA Offi ce Building

US $ Included QARRegistration 1200 a 4404Precertification Review (LEED CS only, optional) 4250Split Review : Design ($0.045 per sq.ft) 9688 a 35553Split Review : Construction ($0.015 per sq.ft) 3229 a 11851Appeals 800CIRs 220

51,808

LEED Commercial Building (20,000m2)

Assuming: 1m2 = 10.76391 sq.ft, 1 US$ = 3.67 QARAssuming: a 20,000m2 GFA Offi ce Building

Totals

GB Certifying Authority Fees: • Access to online resources• Reviews by GB certifying authority• Fixed costs plus variable rates based on gross floor area

Analysis of GB Cost Premiums and Benefit: Soft Costs

• Sustainability Consultant Fees

• GB Additional Studies & Simulations

• Independent Commissioning Authority:

Analysis of GB Cost Premiums and Benefits: Hard Costs

• Additional Equipment & Systems

Analysis of GB Cost Premiums and Benefits: Hard Costs

• Green materials and efforts by Contractor

GB Cost Premiums for various levels of certification (case study example)

• Low-levels of certification may incur GB cost premiums from 0 to 2%

• Mid-levels of certification may incur GB cost premiums 0 to 4%

GB Cost Premiums for Certification Levels (case study example)

• High-levels of certification may incur GB cost premiums >5%

Factors leading to higher levels of GB Cost Premiums

• One size fits all approach

• Weakly enforced GB codes & permit systems

• Inexperienced & difficult team members

• Failure to schedule for sustainability review

• Lack of coordination

Recommendations – Legislating for GBs and commonality of approach to Energy

• Close gaps in current legislation

• Enforce code compliance

• Commonality of approach on energy modelling

• Align with international standards to calibrate and refine results

Recommendations - Lowering costs and building acceptance of GB rating systems

• Regional GB systems must keep fees in line with international rating systems

• Programme-wide approach to achieve economies of scale

• Avoid frequent changes to GB rating systems

• Involve industry for piloting new versions

• Fix sunset dates for future retirement of older versions.

Recommendations - Differentiating and harnessing value from certification levels

• Strive to deliver a return on investment from GB Cost Premiums:

Higher rental/lease rates Lower operating costs Higher occupancy rates

• Remove any market barriers to ‘Brown Discounts’ for non-certified

• Promote the integrity, transparency and perception of GB rating systems

Concluding notes – Qatar’s emerging case studies in urban planning

• Case A: LEED Certified: Qatar Foundation’s Education City Msheireb Properties’ Downtown Doha

• Case B: GSAS Certified: Lusail City New Port Project Manateq economic zones Aspire

• Case C: Non-certified: West Bay Pearl

2016

2022

2026

2030

2036

Concluding notes – Steering Qatar towards sustainable development

• Will areas where sustainability has been adopted from master plan level to building level will command green premiums?

• Will other areas suffer from lower occupancy and a downward spiral of decline in value and rents?

• What will be the average ROI achieved for GB Cost Premiums?

2016

2022

2026

2030

2036

Concluding notes: Steering Qatar towards sustainable development

• “Qatar deserves the best” motto must also apply to future waves of building construction

• QNV2030 issued in 2008 but further tiers of National Masterplanning documents must be issued

• Authorities must close gaps in codes & regulations to steer the market toward sustainable development

2016

2022

2026

2030

2036

Concluding notes: Steering Qatar towards sustainable development

• Numerous examples exist of cities that transformed in successful destinations through deliberate urban planning:

London Frankfurt Chicago Singapore

• For similar success Qatar must be planning led

• Strengthen urban planning authorities and harness the efforts by developers and other interested parties

2016

2022

2026

2030

2036

Paradigm shift towards a virtuous circle of sustainable development

OWNERS/ END USERS

DESIGNER & CONTRACTO

R

DEVELOPERS

INVESTORS

Key messages from GB Cost Premium Analysis (case studies)

• Initial GB cost premium from the outset are offset by long term benefits for owners and occupants

• Unsustainable construction fast-tracks asset-value depreciation and obsolescence of buildings

• GBs need to focus on user satisfaction, comfort and wellbeing, as well as energy and water efficiency

• GBs need to go beyond environmental & economic considerations and embrace social sustainability

Source: McGraw Hill Green, Smart Market Report 2013, www.construction.com

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