Navin Raheja, MD, Raheja Developers shares the Complexities of The Sector
Raheja Developers is among the biggest green building developers in NCR region with investments worth Rs.10 billion tied up. Navin Raheja, MD, shares with Mona Mehta his experiences venturing into this sunrise sector
Raheja Developers is among the biggest green building developers in NCR region with investments worth Rs.10 billion tied up. Navin Raheja, MD, shares with Mona Mehta his experiences venturing into this sunrise sector
B&E: How do cost premiums stand for green buildings viz-a-viz conventional ones and between residential and commercial, which have better returns?
Navin Raheja (NR): When the green building movement first started nearly a decade ago, the cost increase for projects was around 10 to 15 percent but today in reality, it is around 2-4% but cannot be passed onto occupiers in a competitive market like India. Secondly, there's lack of information on green building systems with too much dependency on select few consultants. Thirdly, there's difficulty in assessment of costs and requirements for compliance causing costly delays. The per sq.ft returns on commercial development are the highest as they are leased while residential are sold out at competitive prices resulting in negligible returns.
B&E: What are the long term returns in green buildings and can they break even within 3-5 years of operations?
NR: Green buildings reduce carbon emissions by about 40% compared to conventional buildings. The break even in case of a green building commercial project can occur within 3-5 years time of starting operations due to savings in energy which could go upto 80% & water between 25 to 40%. A green building can also earn Carbon Credits, approximately Rs.7 to 8 million annually for 10 years, for every 2 lakhs sq ft of conditioned area
Navin Raheja (NR): When the green building movement first started nearly a decade ago, the cost increase for projects was around 10 to 15 percent but today in reality, it is around 2-4% but cannot be passed onto occupiers in a competitive market like India. Secondly, there's lack of information on green building systems with too much dependency on select few consultants. Thirdly, there's difficulty in assessment of costs and requirements for compliance causing costly delays. The per sq.ft returns on commercial development are the highest as they are leased while residential are sold out at competitive prices resulting in negligible returns.
B&E: What are the long term returns in green buildings and can they break even within 3-5 years of operations?
NR: Green buildings reduce carbon emissions by about 40% compared to conventional buildings. The break even in case of a green building commercial project can occur within 3-5 years time of starting operations due to savings in energy which could go upto 80% & water between 25 to 40%. A green building can also earn Carbon Credits, approximately Rs.7 to 8 million annually for 10 years, for every 2 lakhs sq ft of conditioned area
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
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