Green Leases on the rise in South Africa

A green lease, explains GBCSA executive chairperson Bruce Kerswill, lays out certain contractual lease obligations between a landlord and a tenant of a building, that require or encourage the adoption of environmentally friendly practices.

To this end, a working group of members from the GBCSA and Sapoa has been established to jointly develop a guide to green leasing.

“Although green leases are becoming the norm in countries such as Australia and the United States, they are a relatively new concept in South Africa. The GBCSA is working with Sapoa to develop a guide to green leasing with recommendations and guidelines that will allow owners and occupiers of buildings to establish green leases,” Kerswill adds.

“Green buildings offering green leases will ultimately attract and retain tenants for longer and at optimal rentals. Additionally, green leases can ensure that tenants and landlords both benefit from the cumulative reduction in operating expenses of a green building. Accordingly, green leases are generally collaborative, with both parties committing to certain obligations,” says Kerswill.

Kerswill says increasing interest in green buildings is encouraging developers to build Green Star SA-rated buildings, which improve building performance. Green leases are a way of measuring this performance and dealing with cost issues. “A green lease ensures a building that is designed to be sustainable is operated in a sustainable way,” continues Kerswill

“The GBCSA recognised the need for a new approach to leasing in 2009 and introduced the ‘green lease’ credit in the Green Star SA – Retail Centre tool, which facilitates the rating of new green retail spaces. The credit incentives and rewards property owners that draw up a green lease with their tenants.”

Green buildings reduce the consumption of energy and other resources, which is becoming increasingly important as these costs continue to escalate. A tenant can use a green lease to ensure the space occupied meets these requirements.

From the landlord’s side, if tenants do not buy in to the concept of a green building, their behaviour can defeat the purpose of the building – especially in areas like energy usage and recycling schemes – and benefits will not be realised.

Because of the health, well-being and productivity benefits associated with green buildings, green leases are also seen as a way of attracting tenants, since about 80% of a person’s waking time is spent at work in the office. Thus corporations view green buildings as a way of attracting high-level staff.

Kerswill explains that some examples of a landlord's obligations as contained in a green lease may be: to meter the energy and water consumption of each tenant separately; to provide certified evidence that all building elements and systems are installed and operated with maximum efficiency; to prohibit the use of CFCs in air conditioning systems; to ensure dedicated recycling facilities are easily accessible; to monitor and adjust air conditioning levels to reduce energy use and to provide appropriate numbers of bicycle storage and changing rooms.

Examples of a tenant's obligations might include: monitoring good levels of indoor air quality and ventilation efficiency; ensuring their offices fit-out avoids the use of toxic materials, uses recycled materials and energy efficient office equipment and that they recycle in accordance with the buildings waste management and recycling policy.

Other examples may be for landlords and tenants to mutually establish an environmental friendly purchasing policy covering ongoing consumables, such as paper, office supplies, printer cartridges and other low-cost items that are regularly used and replaced through the course of business.

The structure of a green lease motivates all stakeholders to invest, operate and work in a building in an environmentally and socially responsible manner. Would you consider green leasing whether you are a tenant or property owner?

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