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Higher rents from greener towers
Brace yourselves. Just when you thought rents couldn't go higher, it looks like they can and will. Going green may be good for the environment, but it's not so good for your bank balance, according to speakers at a Building Sustainability into the Middle East conference last week.
- By Suzanne Fenton, Staff reporter
- Published: 00:04 June 28, 2008
- Experts agree that environmentally-friendly buildings will tax tenants' pockets further.
- Image Credit: Gulf News Archive
Dubai: Brace yourselves. Just when you thought rents couldn't go higher, it looks like they can and will. Going green may be good for the environment, but it's not so good for your bank balance, according to speakers at a Building Sustainability into the Middle East conference last week.
Steven Miller, managing director of Dubai architectural, planning and urban design firm FXFOWLE Architects, said that green buildings really do produce higher rents.
"Properties in western Europe and North America, if it's a green building, had a premium of 17 per cent on sale.
"And if you're leasing a green property, the interest becomes so important, you can get 11 per cent more on rent," Miller said.
Miller said the trend will eventually reach Dubai.
"The trend will move here. Although it's hard to think, rent will go even higher, but in two years, 70 million square feet of leasable space will come on in 2010 in Dubai."
This means that among the buildings under construction in Dubai, the green ones will produce better rents and will also have higher resale values.
But this also means higher rents for already-stretched tenants.
However, Samuel Keehn, environmental and sustainability manager for Dubai-based energy management company EMS International, said it is not all bad news for occupants.
"From the occupants' side, you will be paying more on rent, but later you'll be saving elsewhere, like on operating costs," Keehn said.
All buildings being constructed in Dubai since January 2008 must now be green, under the directive of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, ordering builders and developers to comply with green standards.
Although green buildings are more expensive to construct, they can be cheaper in the long term by reducing operating costs by using less water and energy.
Andy Davids, technical director, structures, for Hyder Consulting, said, "Green buildings or energy-efficient buildings are, by and large, more expensive to build.
"But if their operating costs are low, you're going to get a payback on your investment."
Miller, involved in designing Dubai Waterfront's Canal District, said Dubai is "one of the worst cities in the world, like Los Angeles", for traffic congestion and that it is difficult to plan a car-free environment.
"Any city in Europe that has trams reduces car-use by 26 per cent," said Miller. "In Dubai, there is a total disconnect between civil and architecture works."
Angela Mulgrew, regional environment manager, also at Hyder Consulting, said as urban populations increase globally, it is becoming more important to create integrated cities, to avoid urban sprawl and traffic emissions.
"Urban sprawl means an extended infrastructure is required as more people will need their cars, meaning more emissions. Dense cities allow a more integrated transport system leading to integrated cities, like Dubai," Mulgrew said.
Hurdles
Reducing car use can only be a good thing in Dubai but is being prevented by the popularity of villa-living.
Samuel Keehn said there is a "villa phenomenon" in Dubai which promotes urban sprawl and is against the concept of going green.
"This phenomenon is to keep up with the Joneses. I think once the Metro gets going, like in New York, people will like urban living," Keehn said.
According to Miller, Dubai is "too polarised" as people are either living in villas or in high-rise apartments.
"I think it will change with this intense green philosophy. People will believe that living on the other side of Emirates Road in a villa is ludicrous, when they could live in an urban environment," Miller said.
Davids rued the misconception that there is uncontrolled construction going on here, but the reality is different.
"Then you explain about district cooling and chilled water [used in air conditioning] and that all parks are fed from grey water.
"I challenge these people to show me another city in the developed world that has district cooling and recycled water and they're usually pretty silent," Davids said.
Will this just drive up the rents? Would you be willing to pay more to live in a 'green' building? Tell us at letter2editor@gulfnews.com or fill in the form below to send your comments.
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