Green materials market to reach $406 bn by 2015

Green materialsA growing demand for green building material has been noted in the regional real estate industry. This is driven by the increasing stress on implementation of green building standards by local governments and civil authorities.

Concern about the impact the construction industry has on the local environment and a realisation of the need for sustainable development has fuelled a drive to align the construction industry to green building standards.

According to recent research, the global market for green building material is expected to be worth $406 billion by 2015, driven largely by environmental consciousness, high energy costs, and the understanding that green buildings contribute to long-term benefits such as improved efficiency, cost savings and higher production. As costs of green building materials drop, they are becoming increasingly popular the world over.

Worldwide, buildings consume nearly 40 per cent of the world’s energy, 25 per cent of its wood, and 15 per cent of its water. As such, buildings account for 30 percent of greenhouse gas emissions and have significant impact on the environment, economy and society.
Therefore, green buildings can make a major contribution to tackling climate change and energy use. In order to accomplish the goal of low impact development and a sustainable future, the green building must be a global movement.

“The push to conform with global best practices in sustainable real estate development is gathering pace in the Middle East,” said Ahmed Pauwels, Chief Executive Officer of Epoc Messe Frankfurt.

“As construction majors look to decrease their carbon footprint and adopt environmentally-friendly building methods, the demand for green building material is quickly gathering pace,” he added.

A United States Green Building Council (USGBC) research Green Jobs Study projected that, over the next three years, green construction will contribute $554 billion to the US national economy, while the number of green jobs will rise almost fourfold to 7.9 million.
The study also found that green buildings are already saving their owners money. The study estimated that, between 2000 and 2008, green construction and renovation was responsible for $1.3 billion in energy savings. The report forecasts that between 2009 and 2013, this number will rise to $6 billion.

In terms of green real estate investment, this means big opportunities. A report by Pike Research, a clean tech market research company, found that green retrofits for commercial properties “represent a $400 billion market opportunity.”
“High-performance green building space experiences lower vacancy rates and commands a premium price, compared to conventional space,” Pike Research’s managing director Clint Wheelock says.

“Because of this, commercial building owners are adopting green retrofits as a market differentiator. The favorable retrofit business model will fuel steady momentum until most commercial building space has been retrofitted for energy efficiency.”

The benefits of green building are not limited to energy savings, however. Recent research by the University of San Diego and CB Richard Ellis Group, Inc showed that tenants in green buildings were more productive than their counterparts in conventional spaces, and had fewer sick days, leading to a net impact of almost $25 per square foot. The study also backed Pike’s findings that green buildings experienced higher rental rates (13 per cent higher than average) and lower vacancy rates (3.5 per cent less than average).
Governments around the region are enacting legislation to bring the industry into line with green building standards.

Recently, Abu Dhabi rolled out the Arab world’s first specialised green building rating system, Estidama. All new development in the emirate must comply with the standards set by the system, including commercial and government projects. Dubai too has been driving change through increasing implementation of LEED standards across the construction industry.

Green roofs is one of the largest and fastest emerging product categories currently. The practice of planted green roofs is gaining momentum across the industry and is given a strong push by local authorities who are spear heading initiatives to increase the number of green roof projects in the region.

USGBC reports that one billion square feet of buildings around the world have now been LEED certified. Although that is just a drop in the global bucket, certification has helped to spur green construction; according to the Green Outlook 2011: Green Trends Driving Growth report by McGraw–Hill Construction (MHC), LEED specification is mentioned in 71 per cent of all U.S. projects valued at over $50 million.

Green Outlook 2011 forecast that the U.S. green building market would reach $135 billion by 2015, up from $71 billion in 2010. A third of all new non-residential construction is green, a $54 billion market opportunity. McGraw–Hill Construction predicts that in five years, major retrofit and renovation projects will total $18 billion. Green healthcare construction is expected to reach approximately 40 per cent of this segment in 2011.
Riding on the tails of the green construction market, the US market for green building materials also shows promise. This market will range from $5-$11 billion in 2011 (depending on who you talk to), with double-digit growth over the next few years. One forecast predicts the market for green building materials will reach over $30 billion by 2014.

Indian and Chinese building sectors are the major growth drivers in this region. The Chinese building market is chiefly driven by demand for commercial building space. The commercial office buildings with an area between 100,000 and 150,000 square meters and residential developments spanning across more than 500,000 square meters of construction area will be in demand in China over the next 15 years. A growing market combined with favorable government policies mark the Asia-Pacific region as the next growth driver for the global green building industry in the coming years.

Green buildings help to reduce carbon dioxide emissions through low consumption of energy. The global carbon offset trading market stood at around US $100 billion in 2008. Globally, buildings account for 39% of total energy usage and 38% of the carbon dioxide emissions. Green buildings use 30% lesser energy than the conventional buildings and thus help to reduce CO2 emissions. Reduction of each ton of CO2 will lead to generation of one Certified Emission Reduction (CER) valued at around $16 in the United States and around $22 in Europe.

Benefits of Green Buildings

It is a no-brainer that green buildings have many benefits, including lower energy costs and water conservation.

The United States’ Environmental Protection Agency (EPA) has found that green buildings with a recycling focus can reduce waste output by 90 per cent and use 30 per cent less energy, which equates to a 5 per cent increase in net operating income.

In Green Outlook 2011, building owners cited three business benefits as the main drivers for building green. In addition to reduced operating costs of 13.6 per cent on average for new buildings and 8.5 per cent for retrofits, building values increased by 10.9 per cent and 6.8 per cent, respectively. In addition, return on investment increased by nearly 10 per cent for new buildings and by almost double that for retrofits.

A study – Do Green Buildings Make Dollars & Sense? – of 154 green buildings totaling 51.6 million square feet in 10 U.S. markets found that green buildings have 3.5 per cent lower vacancy rates and 13 per cent higher rental rates.

Green flooring, which includes carpet, bamboo, and cork flooring, will become the market’s fastest grower. The demand for Forest Stewardship Council (FSC)-certified wood panels is predicted to more than triple between 2008 and 2013, growing more than three times as fast as the overall market for wood panels. Other products expected to see double-digit growth through 2013 include water-efficient plumbing fixtures and fittings and energy-efficient lighting fixtures.

The green building industry will rebound in 2011 despite the continuing economic difficulties, according to green building and sustainability consultant Jerry Yudelson.
He sees 10 major trends driving adoption of green building techniques and technology around the world. In developing his annual Top Ten list of green building trends, he spoke with green building industry leaders in the United States, Canada, Europe, Asia, the Middle East and Australia.

“What we’re seeing is that more people are going green each year, and there is nothing on the horizon that will stop this trend,” said Yudelson, who is the principal of Tucson, Ariz.-based green building consulting company Yudelson Associates.

Source: www.GulfPropertyme.com

Leave a Reply Text

Your email address will not be published. Required fields are marked *

newsletter
Want to keep up to date with all our latest news and information?
Subscribe to receive FREE TIPS, all new Radio/Podcast Episodes and Videos that will help you start Dropping your Energy Bill!
Enter your email below to join a world of new knowledge and savings!


LOGO