Pál Baross, one of Hungary’s leading experts on green development, talks about environmental accreditation and its importance in any new construction projects.
Pál Baross, the president of the Hungarian Green Building Council (HuGBC), discusses with the Budapest Business Journal the importance of green accreditation in the real estate development process. Baross is a qualified BREEAM and BREEAM in-use assessor – and is therefore able to assess the environmental and sustainability rating of commercial real estate projects in Europe. He is also the director of the Campus Redevelopment Office at the Central European University (CEU), which is overseeing the construction of the first non-commercial building in Hungary to achieve BREEAM certification. He previously served as advisor to the Mayor of Budapest on issues relating to public property management, and was country manager for the developer ING Real Estate Hungary.
What role does green accreditation play in the development process?
Green accreditation can be viewed from three approaches – developer, investor and tenant. From the perspective of a developer, sustainability certification is now a necessity in order to source development financing and to successfully let a project. From the point of view of an investor, green certification is now mandatory if a core or value-add project is to be purchased. From the tenant perspective, potential occupiers require sustainability accreditation. This relates to the need for a work place to be a healthy environment with regard to such issues as air quality, humidity and the provision of natural light. Green buildings have lower utility costs, lower maintenance costs and lower capital expenditure costs. In addition green buildings deliver an improved interior that has been shown to increase occupant productivity; in this way a healthy work environment is a productive work environment.
What are the most important issues with regard to BREEAM and LEED accreditation?
One of the most important issues is location. First of all the right location in which to develop has to be sourced. It is very important that office development in an urban context is close to public transport; such locations are essentially brownfield sites. This is an important principle as, around ten years ago, there was a danger that the office market would “suburbanize” but, as the Tó Park development showed, this view was premature and not what was needed at the time. The labor market wants offices to be in Budapest.
The second issue is to find an architectural team that has knowledge of sustainable design. Energy saving is of course one of the principle aspects but there are many other issues that lead to user-comfort in the building. Buildings have to be designed so that natural light is strong, there needs to be the ability to look out from the building as the last thing a worker needs is not to see any daylight all day. There is also a need for green surfaces such as gardens and rooftop areas with easy access. For example, I was researching the Siemens building, where I saw huge amounts of green space on the roof and on former garage spaces.
The third element is to include a building management software system that enables all the equipment to work in harmony. Such a system is not expensive, between €20,000-50,000.
Once a building has been completed, the right facility management staff is required. You can no longer get away with employing under-qualified technicians and engineers to run a system. There is a need to ensure that the system is run at an optimal level and to utilize user feedback using a number of monitors in the building to measure the ecological footprint. We are curious about many aspects of our lives such as our heart beat, sugar level or cholesterol level, and this concern for personal health is something that we can also generate for buildings.
What proportion of office projects are green accredited?
All class “A” buildings are now green accredited. With regard to value-add purchasers there is a need to generate volume from the building and this involves improving the environmental performance of the building and, therefore, we are seeing more BREEAM in-use and LEED in-use accreditations. A typical case is in Debrecen where a building was developed ten years ago with a very good long-term tenancy that was coming up for renewal, so the owner decided to upgrade the building in order to ensure the tenant would stay for a further ten years, rather than move to a new building.
What is the essential difference between LEED and BREEAM?
With regard to the different accreditation organizations there is no big difference between LEED and BREEAM. However, LEED is more difficult to adjust to a Central European market because of the conversion of measurements to metric for some of the energy models. However, there are certain big developers like Skanska that have a very strong market share in the United States so they choose the U.S.-based LEED, as this is their prime market from where they have most experience. All European asset and fund managers essentially require BREEAM qualification, because many of their properties are in the U.K.
Do sustainability elements apply at all stages of the development process?
A well-coordinated design team is needed, where everybody is aware of his or her contribution to accreditation; this applies to architects and engineers and facility managers if it is a renewal of a building. The other necessity is for a vigorous accreditor – that is somebody who manages the process and acquires the documentation at an early stage.
Does this incur more expense?
Up to the “Very Good” level extra investment is not required. However, once you move to the “Gold” or “Diamond” categories, then you have to include very high tech or a very alternative green energy supply. This can be more expensive, so there is an up to 10% extra cost, but this will also bring in higher energy savings.
Is it a conflict of interest that consultants act for developers as well as being assessors?
Consultants acting as assessors submit their report and the real assessment is undertaken in the U.K. or U.S. In this way, assessors put together reports for a third party independent institute. So there is no conflict of interests for consultants. The question is who they represent: when, for example, acting on behalf of a tenant, they could push very hard for the owner to install elements into the building that are not economically justified given the length of the tenancy contract. An investor is striving to match the length of the lease with the amount of money it invests on behalf of the tenants. However, with the green push this can be a difficult challenge.
How important are issues relating to energy consumption?
I would say that energy consumption is the most quantifiable element. When you look at the productivity side, regarding how people work in different environments, then I think that the management of work space comfort is critical. This consists of design elements that are more difficult to quantify. Energy saving and carbon footprint are the easiest aspects of the product to quantify and document.
How does Hungary compare to elsewhere in Central Europe with regard to accreditation?
Hungary is seen as probably ahead of Czech Republic with regard to commercial office sustainability accreditation, and on a par with Poland in terms of the proportion of new buildings that are green accredited. With regard to new buildings in Hungary, this is now 80-90%, and for refurbishments it is 15%.
Is accreditation increasingly the norm with regard to other sectors?
The logistics market is producing green buildings, partly because they are huge buildings in which they are able to install energy conserving devices and harness water from their sites. With regard to retail, the biggest problem is that you can make new projects structurally green but consumers also need to behave in a sustainable way. I would also argue that with on-line retail there could be a more sustainable retail concept. There could be more on-line sales with the shop itself acting as a warehouse space. I am looking for a change in government policy and through the Hungarian Green Building Council I am striving to change thinking from architects and engineers so we could scientifically and cooperatively design green buildings if we had a Hungarian green qualification system.