As sustainable development gains momentum, the real estate industry is transforming to prioritize environmentally friendly building designs and operations. Among the many green building certifications globally, EDGE (Excellence in Design for Greater Efficiencies) emerges as a practical and cost-effective solution tailored to emerging markets. But what does EDGE certification mean for property valuation? Here's a closer look at its impact, with relevant insights for Kenya.
What is EDGE Certification?
EDGE certification, developed by the International Finance Corporation (IFC), evaluates buildings based on three key resource efficiency parameters: energy use, water consumption, and embodied energy in materials. A building achieves EDGE certification by demonstrating at least a 20% reduction in all three areas compared to conventional buildings. This benchmark ensures that EDGE-certified properties offer both environmental benefits and economic value.
Key Benefits of EDGE Certification for Property Valuation
1. Lower Operating Costs
EDGE-certified buildings significantly reduce utility bills through resource-efficient features such as solar energy systems, water-saving fixtures, and smart lighting. These cost savings translate into a higher net operating income (NOI)—a critical metric for property valuation.
For example, consider a commercial office building in Nairobi’s Upper Hill area. By implementing energy-efficient technologies, the building saves millions annually on electricity and water costs, making it more attractive to investors and tenants.
2. Enhanced Market Appeal
Sustainability is a growing priority for tenants, particularly in Kenya’s urban hubs like Nairobi, Mombasa, and Kisumu. EDGE certification enhances a property’s marketability by appealing to environmentally conscious renters and buyers. This can lead to:
Higher rental yields.
Faster occupancy rates.
An example is Two Rivers Mall, which incorporates energy-saving technologies. Tenants often view such properties as better investments, ensuring both cost savings and alignment with ESG (Environmental, Social, Governance) principles.
3. Regulatory and Financial Incentives
Kenya has made significant strides in promoting sustainable construction, with incentives such as:
Green Building Standards under the Energy and Building Codes.
Access to green financing through programs like the Kenya Green Bond.
Developers of EDGE-certified buildings can benefit from expedited permitting and financing advantages, such as lower interest rates from green-focused financial institutions like Stanbic Bank. These incentives reduce upfront costs and enhance project profitability.
4. Future-Ready and Resilient Properties
EDGE-certified properties are better prepared for future challenges, including rising energy costs, climate change, and evolving regulations. Buildings in areas prone to flooding, such as parts of Kisumu, can mitigate risks by incorporating efficient water management systems, ensuring long-term operational stability. Investors often assign a premium to properties with such resilience, recognizing their potential for sustained value growth.
Why Choose LASER Property Services for EDGE-Certified Buildings?
At LASER Property Services, we are at the forefront of promoting and managing sustainable developments in Kenya. Our expertise in property management and valuation ensures that clients maximize the benefits of EDGE-certified buildings.
Our Value Proposition:
Expert Valuation Services: We provide precise valuations that capture the economic and environmental benefits of EDGE-certified properties.
End-to-End Solutions: From advisory on achieving EDGE certification to tenant acquisition and management, we handle it all.
Local Insights, Global Standards: With a deep understanding of Kenya’s market and global sustainability trends, we position your properties for optimal growth.
Examples of Our Edge Services: Asset Optimization: Partnering with developers and landlords in various Nairobi projects to integrate green technology, resulting in 30% savings on operational costs.
By choosing LASER Property Services, you partner with a team committed to delivering measurable value through sustainable property solutions. Let us help you unlock the full potential of EDGE-certified buildings and position your investments for long-term success in Kenya’s evolving real estate landscape.
Contact us today to learn more about our services!
The writer of this article is Collins Chumo – Manager, Valuation & Property Consultancy Services at Laser Property Services
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