The Green Riddler

Developers have started looking at green buildings for the housing market. Is this just another way to make a quick buck? While energy conservation is the way forward,it will take time for demand to rise

The real estate market is poised on the brink of over-supply and developers are pulling out all stops in their efforts to try to woo back the investor. From luxury housing projects in cramped city centres to golf homes on the outskirts,and from commercial complexes with inadequate amenities to malls with landscaped gardens,there is a vast range of investment opportunities to choose from. However,with over half of the investments coming from speculators,demand has not been commensurate with supply.

For close to ten years now,developers have given investors another option that of green buildings. But at a time when the buzzword in the industry is that of affordable housing,does such a concept of green buildings which purports to be financially beneficial for the end-user in the long run really hold water? With the general suspicion that developers are viewed with,with different and competing rating agencies for energy compliance certification,and with a Western idea that needs time to be accepted by the Indian mindset are green buildings really the way to go? Of course,energy efficiency is the need of the hour 8212; but does this concept not require more time to evolve in India before developers jump on the bandwagon for opportunistic gains?

Unnecessarily overpriced?

8220;In the name of green buildings there is tendency among developers to overcharge clients. This should not be the case as it defeats the purpose of a green building, says Dr A K Chatterjee,director,Dr Fixit Institute of Structural Protection and Rehabilitation DFI-SPR. The institute,which has completed several international and national projects,offers solutions for ensuring structural durability.

Says Jones Lang LaSalle Meghraj JLLM chief executive officer for operations,Santhosh Kumar,8221;The developer markets the amenities offered with the construction of a green building as an added facility,for which he bears additional cost. This ultimately is passed on to the consumer. However,I do not think this makes projects expensive considering the long-term returns one can expect.8221;

The concept of green buildings has not taken off in the residential segment,and the few attempts that have been made are purely from a commercial perspective,says Dr Chatterjee. 8220;In the name of green houses,we should not charge more to the clients. This would result in only the upper crust of the buying populace investing in such projects. Higher pricing in the name of green housing is not the right strategy,8221; he says.

Big companies like Infosys and ITC may be in a position financially to opt for green structures. And it makes more business sense for such players. It is proven that green buildings 8212; with better lighting,ventilation and energy efficiency 8212; improve efficiency levels of employees and ensure future savings. Besides,it also adds to the publics perception of the companys social awareness.

Change in focus

While the current focus is on commercial buildings,developers believe it is a matter of time for eco-housing and green residential complexes to gain in demand. While Ansal Properties and Infrastructure API recently launched an upscale green project in Gurgaon,3 C Universal Developers has plans of developing 20 million sq ft of green space in residential and commercial segments. Another Delhi-based developer,Earth Infrastructure,has invested Rs 630 crore in two green projects in Greater Noida.

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We have investors from Europe and India banking on our two projects one commercial and one residential. Our residential project is definitely not overpriced8230; depending on the plan chosen it is between Rs 1,900 to Rs 2,100 per sq ft. We see residential investors driving the market in the future8230; and an increase in residential projects compared to commercial ones, says Earth Infrastructure director Vikas Gupta. The company is also a founding member of the Indian Green Building Council IGBC.

Says JLLMs Kumar,It will take some time for the market to mature for the concept of green housing in the residential segment to take off. Many corporates are now preferring to remodel and refurbish existing structures to meet green standards,besides also investing in new commercial projects8230; while I cannot put a time-frame on it,the demand for residential green buildings is still some time away.

Expertise lacking

With the general perception that builders wash their hands off projects once handed over to the end user,there are always concerns about maintenance. Living in an ordinary housing society comes with headaches of plumbing issues,electrical wiring and structural durability to name a few. Imagine the level of maintenance that needs to be carried out for green buildings with their advanced energy conserving amenities.

Training requirements for green buildings are not commensurate with development in the segment. And,holding a few exhibitions or discussions on the subject will in no way change the scenario. We are in talks with the government for holding seminars for developers,builders,architects and evaluators to bring more expertise into the sector. That is what needs to be focussed on, says Dr Chatterjee.

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The Energy and Resources Institute Teri associate director Mili Majumdar has said eco-design for the residential sector is limited as developers do not have the capability to orient each house to maximise energy efficiency,as compared with commercial structures. For energy efficiency in homes,Majumdar points to the Bureau of Energy Efficiency8217;s BEE labelling programme,which has already targeted the sector by rating appliances.

8220;It will be a challenge to maintain green buildings. Besides that,there will also be challenges faced at several stages of construction. There are different agencies today that builders can approach when seeking certification for compliance with green norms,8221; says Kumar.

The IGBC,which is part of the Confederation of Indian Industry-Sohrabji Godrej Green Business Centre CII-GBC,has been according Leadership in Energy and Environmental Design LEED standards since 2001. There is also the more recent Green Rating for Integrated Habitat Assessment Griha from The Energy and Resources Institute Teri.

8220;There is no question that LEED standards which faced criticism for being a Western concept not applicable to Indian climatic and geographic conditions have had to evolve. Hence there is an LEED-India certification which takes the country8217;s conditions into account. But there is always scope for improvement,8221; says Dr Chatterjee. While IGBC says there is not much difference between their test and those conducted by Griha,officials of the latter claim that the parameters measured in their test for green certification is more suited to Indian conditions.

The future

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Despite the differences that exist between rating agencies,the scepticism that developers are viewed with and deficiency in skilled manpower for such structures,there is no doubt that buildings whether commercial or residential need to become more energy efficient. Norms under the National Building Code

being adhered to by LEED-India and Griha,besides the Energy Conservation Building Code by the BEE,are clear indicators about the seriousness with which the government views the subject. However,without proper training and builders improving standards,the buyer will continue to remain speculative. Let us hope that what is the way forward in housing does not crumble while the foundation is

being laid.