Green Building Pioneers Delivering Business Value in Nigeria

Mark Chieshe

Global trends indicate that green buildings will eventually transform the real estate market. World leaders are fast adopting sustainability policies and setting ambitious net-zero emissions goals to mitigate climate change in alignment with the UN SDGs and Paris Agreement. In response, international finance institutions and leading investors are re-orienting finance towards more sustainable investment portfolios.

The growing shift towards sustainable financing is evidence of the significant benefits of investing in green in lieu of conventional buildings. Lower interest rates, extended loan terms, and other benefits can be realized by green developers and tenants. Statistics show that inefficient buildings risk a loss in value as regulatory authorities enforce stronger building regulations and policies mandating energy-efficient structures and more tenants become aware and knowledgeable about the impact of climate change and the utility savings and comfort that green buildings offer.

In contrast, real estate developers who build sustainably have better access to financing and attract investors and partners that help them scale operations in an evolving market to meet changing tenant preferences and building regulations. In their design, construction, or use, sustainable and net-zero carbon buildings produce minimal negative impacts on the environment and climate. According to the requirement set by the Paris Agreement, all new buildings should be carbon zero by 2030 while existing buildings need to meet this challenge by 2050 to prevent a 2 degree rise in temperature. Furthermore, sustainable buildings preserve natural resources and improve the quality of life.

As sustainable building pioneers, developers leverage a historic opportunity to play vital roles towards the emergence of a new housing industry that is good for the environment and good for the bottom lines of their stakeholders.

Sound industry facts underpin this trend. International Finance Corporation (IFC) estimates green buildings will represent a $24.7 trillion investment opportunity across emerging markets by 2030, one of the biggest opportunities of the decade. A recent report by Market Research Future, a global market research company based in the United Kingdom, anticipates that the green buildings market would grow at 14.3% between 2020 and 2027.

In Nigeria, the green building movement has gained some housing industry traction within the past three years. Reputable developers in key sectors of the built environment are leveraging EDGE, a global green building certification system currently available worldwide to build green. An innovation of the International Finance Corporation (IFC), a member of the World Bank Group, EDGE (Excellence in Design for Greater Efficiencies), is helping developers to champion eco-friendly change in different building sectors. The scope of adoption cuts across critical segments such as residential, office buildings, and hostel accommodation. The EDGE assessment tool is accessible and usable for all free of charge at edgebuildings.com.

Greenage: Championing Green Hostel Accommodation for Universities

A recent example is Greenage Development Managers, a private equity-driven fund and on-campus student and faculty housing projects provider. Greenage aims to transform the student housing sector by delivering EDGE-certified student housing in higher-education institutions across Nigeria. With over 170 universities, 43 polytechnics, and an annual enrollment of over 2 million, Nigeria has a massive deficit of quality and affordable student accommodation. Greenage plans to leverage green building solutions and EDGE certification to unlock innovative financing to lead in this segment on the back of its $150M Student Housing Fund.

Greenage will use the fund to deliver 100,000 bed spaces across Nigeria over ten years. The first phase kicked off in May with the groundbreaking ceremony to develop 500-1,000 bed spaces at Veritas University, Bwari Abuja. Other universities, including the Arthur Jarvis University in Calabar, University of Abuja, and the University of Nigeria, Nsukka Enugu, are all on the line as potential clients of Greenage.

Pioneers of “Green” Residential Buildings

In the residential building segment is Echostone, an EDGE pioneer that uses its innovative building technology to deliver resource-efficient buildings that target the mass market in Nigeria. The firm has an ambitious plan to build 100,000 EDGE-certified homes across Nigeria over the next five years. With Peridot Parkland Estate, Echostone partnered with the Lagos State Government to deliver 252 affordable homes. The green homes incorporate resource-efficient features that give 53% energy-savings home, 42% Water Savings and 35% Carbon Savings.

Alpha Mead Development Company, another EDGE client, has pioneered the construction of climate-smart residences that target the mid-to-high-end segment of the Lagos elites with the Lekki Peal Estate. The estate comprises 112 units of flats, contemporary terrace units, stylishly designed semi-detached & luxurious apartments.

With 40% energy savings and 30% reduced water consumption, Pearl Estate has received an EDGE Advanced Certification. Despite the premium prices for its residences, occupants are happy to live there because they enjoy lower utility bills and the comfort that green solutions provide make it all worth it. Also, the construction costs are not significantly higher as some developers believe. Savings can be seen with an incremental cost increase of as little as 0.5% up to about 3% with reasonable improvements. Therefore, it is appropriate for both affordable and luxury buildings.

ACA – A String of Green Partnerships

Another prominent real estate investor that has invested heavily in green buildings in Nigeria is African Capital Alliance (ACA). ACA has formed several strategic partnerships to deliver premium and resource-efficient residences in Lagos, Nigeria’s biggest city.

ACA has teamed up with Elalan Group, a construction and civil engineering firm, to develop Blue Waters. Located in Lekki Phase 1, an affluent area on the south of east of Lagos city, Blue Water is an imposing architectural masterpiece that dots the Lagos skyline.

The first phase of the project, named Sapphire, is a 17-story 124-unit residential tower. The modern building has thermal performance glass, energy-efficient lighting, and cooling systems to reduce energy use by 27%, low-flow faucets, and dual-flush water closets that minimize water use by 28%. For occupants, this means lower utility costs while owners have the room to charge premium rates. The project received a preliminary design stage EDGE certification.

Green EDGE Office Buildings

The global trend also indicates that green office buildings are the wave of the future. Beyond climate-change mitigation, sustainable office buildings emphasize health and wellness – both key to increased employee productivity. Africa Capital Alliance (ACA) has recognized this segment’s investment value and partnered with Samges Investment Limited to build Alliance Place. This high-performance office accommodation is in Ikoyi, Lagos.

The building plan considered the benefit to the environment and employees’ comfort and well-being. Some of the green solutions used include features that allowed natural daylight and well-ventilated spaces. As a result of its impressive green credentials, Alliance Place has attracted international tenants that are sensitive to the impact of buildings on the environment and value the benefits that sustainable office buildings have on staff productivity and utility payments. They include the ACA and IFC, a member of the World Bank Group. Alliance Place has received the final EDGE certification from Sintali-SGS.

Cornerstone Tower

African Capital Alliance (ACA) has also partnered with Cornerstone Insurance to build Cornerstone Tower, a premium resource-efficient office accommodation in Victoria Island, Lagos. An architectural masterpiece that has at its design core respect for the environment, the EDGE-certified building incorporates a range of climate-smart solutions that guarantee comfortable spaces for occupants, a sense of prestige, and lower utility operations and maintenance costs.

By optimizing the building design using the EDGE software, the developer achieved 31% energy savings by using a reduced window to wall ratio, insulated roof, higher thermal performance glass, lighting controls for corridors, staircases, and occupancy sensors. The building would also use 53% less water owing to fixtures such as low-flow faucets, dual-flush water closets, and water-efficient urinals. This saves both the building owner and the tenants money.

Africa Capital Alliance is not the only big player in Lagos’s emerging “green” luxury office accommodation. ITB, a leading construction company specializing in designing and building high-rise structures, is also leveraging EDGE certification to map a more sustainable future for its investments. The company is developing Alpha 1 – Eko Atlantic City, a 14-floor structure with modern, tastefully furnished offices in the Marina District of the new Eko Atlantic City. The EDGE-certified building has climate-smart features such as smart metering and building management systems that save energy and water while lowering the impact on the environment.

Time to Scale

The green building space in Nigeria now is mainly concentrated in Lagos, the nation’s commercial capital. Most of the buildings are in strategic city areas such as Victoria Island, Lekki, Ikoyi, and Marina. For a start, this welcome and understandable. However, more Nigerian developers need to start building more sustainably to play their part as responsible corporate citizens in the global rally to defeat climate change and build future-proof business portfolios. Sustainable buildings have proven to make remarkable business sense for investors. They attract premium tenants and have higher future value because of their inherent capacities to lower utility, operations, and maintenance costs. The resale value of a sustainable building is also significantly higher. The premium for going green pays off several times over in the short to medium term of a building’s life cycle, a fact that validates the business case for climate-smart portfolios.

More so, the world is moving towards a green economy, and companies and investors that move in another direction run the risk of being left behind. The time for action is now. The confluence of government and business bolsters the case for developers to go green, and for a good reason. It is time for more developers in Nigeria to get on board – for business and the environment.

* Chieshe is a housing policy analyst based in Abuja

mchieshe@gmail.com