Global LEED market

4, Nov, 2009

Bureau Veritas

Evolution of Green Building

Global Green Building Milestones
National Environmental Policy Act Created U.S. EPA ASHRAE standard 90 Energy-design standard for U.S. buildings EU Council Directive 80/770/EEC First EU environmental legislation air quality limit and guide values BREEAM launched in UK First national green building rating system U.S Green Building Council Formed Energy Star Program Expanded For buildings launched

1970

1975

1980

1990

1993

1995

1998

2006

2007

2008

2009

LEED launched Israel Standard for Green Building Energy Conservation Building Code in India Energy efficiency standards for design and construction Dubai Green Building Mandate All new construction must be green CASBEE launched in Japan Voluntary assessment tool for NC LEED 2009 v.3 Launched focusing on Energy efficiency UK & France sign MOU to develop common single rating tool UK Sustainable Homes Mandate All new homes must rate against Code for sustainable Homes
LEED in Korea _ 4, Nov, 2009

LEED Market Status

Registered & Certified LEED projects

United Kingdom Certified: 4 Registered: 14 Italy Certified: 2 Registered: 42 Spain S i Certified: 2 Registered: 28

China Certified: 39 Registered: 210+ Germany Certified: 1 Registered: 77 Turkey Certified: 3 Registered: 10 India Certified: 35 Registered: 81 Japan Certified: 3 Registered: 13

Israel Certified: 1 Registered: 2

UAE / DUBAI Certified: 6 Registered: 516 Saudi Arabia Certified: 1 Registered: 20 g

Hong Kong Certified: 4 Registered: R i t d 12

Thailand Certified: 2 Registered: R i t d 10

Qatar Certified: None Registered: 34 g

Singapore Certified: 3 Registered: 10

* Source: USGBC Website 30 Oct. 2009, excluding LEED 3 projects LEED in Korea _ 4, Nov, 2009

RENTS & VALUES IN COMMERCIAL BUILDINGS

Direct Rental Rates ($/ft2)
32 30 28 26 24

Transaction Price ($/ft2)

400 350 300 250 200

31.4 29 29.5 27.4

150 100 50 0

353 266 245 270

2006 Q1
LEED Traditional

2007 Q2

2005
LEED Traditional

2006

Conclusion

The more green buildings attracted rents per ft2 around 6% higher than traditional Over the fifteen months analyzed, the average rent rose by 8.2%, compared with 7.6% growth on the traditional The green buildings appeared to secure a sales price premium of around 9% in 2005 and as much as 30% in 2006
[Source] Miller, Spivey and Florance (2007) / CBRE report Sampled from 223 Energy Star compared with 2,077 Non-Energy Stars from CoStar Group data of 435 Energy Star + 238,808 Non-Energy Star Buildings

LEED in Korea _ 4, Nov, 2009

RENTS & VALUES IN COMMERCIAL BUILDINGS

Rental Rates ($/ft2)
28

Transaction Price ($/ft2)

340

26

9.7%
27.07 24.68

320 300

11.5%
318.38 285.44
LEED Overall

24

280 260

22 LEED Overall

% Leased
90

Conclusion

Certified buildings have a rental p e u Ce t ed bu d gs a e e ta premium The more highly rated, the greater the rental premium For transaction prices, 10% premium for Energy Star and 31% for LEED (292 Energy Star
and 30 LEED buildings analyzed)

88

2.7%
86

88.4 86.06

84 LEED Overall

Benefits of a better image, higher productivity or lower operating costs are not included
[Source] Working papers in real estate & planning 09/08, Henley Business School

LEED in Korea _ 4, Nov, 2009

PROFITABILITY OF GREEN BUILDING

Average Rents & Vacancy Rates

Time series data of 350 LEED and 1,105 1 105 Energy Star building in USA All types of certified buildings exhibit lower higher average rents and lower vacancy rates than the benchmark group of Class A and Class B office building Rental rate for LEED Silver and Gold certified properties is consistently higher Vacancy rates of certified buildings exhibit an overall decreasing trend in recent periods while the benchmark group, particularly the Class B type is increasing

Average Rents

Average Vacancy Rates

Energy Star is an energy performance rating program of the building energy, has a narrower scope than LEED but can be used as a proxy for green buildings.

[Source] Working papers in real estate & planning 09/08, Henley Business School

LEED in Korea _ 4, Nov, 2009

PROFITABILITY OF GREEN BUILDING

Green building profitability For commercial real estate, there are increases in occupancy rate, tenant retention, tenant satisfaction, asset value and shareholder value while driving down operating costs Also corporate owned buildings experience reduced operating costs, improved employee relations and increased shareholder value For hospitals, schools and retailers are experiencing clear improvement in their area.

Rent Ratio Increases

3.0% 3.5% 6.6% 7.5% 9.0%

Occupancy Ratio Increases

ROI Improves

Building Value Increases

Operating Cost Decreases

Source: USGBC& GBCI S McGraw-Hill Construction, Key Trends in the European and U.S. Construction Marketplace SmartMarket Report, 2008 McGraw-Hill Construction, Greening of Corporate America SmartMarket Report, 2007

LEED in Korea _ 4, Nov, 2009

Thank you