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    Posted December 24, 2013 by
    Sivarnee
    Location
    Bangkok, Thailand

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    Thailand's green building goals: Aspirations vs Realities

     
    The number of green building in Thailand has been growing rapidly since 2007, almost doubling annually between 2007-2012 as the direct result of increasing awareness driven by the Thai Green Building Institute, Universities, the private sector, and the Thailand government. New commercial constructions account for almost 80% of green buildings in Thailand because they are easier to adopt compared to restructuring existing ones. Moreover, green buildings are currently limited to the commercial sector high building, as the accrued green cost is easier to bear by the companies as its tenants, compared to the individual occupying the residential buildings.

    According to Mickael Feige, the Manager of Solidiance's Thailand operation, there was 0 green building in Thailand as of 2007, and now the number has increased to reach 22 green buildings. "Although it's still small in number, but Thailand is not behind its counterparts in other ASEAN countries," Mickael added.

    Key drivers for green buildings in Thailand

    Image cautious multinational companies (MNCs) are increasingly looking at setting up (or mandating) their operations in green buildings in Thailand to leverage their corporate branding, which is considerably impactful for the green building development.

    In the case of new construction projects, there is a significant decrease in operating cost resulting in higher savings as the building ages over time, with a certain amount of added asset value and time on the return on investment (ROI).

    Meanwhile, the operating costs of green retrofit or renovation projects are lower than the new buildings over the first year, but are limited to 13% over 5 years. The immediate cost savings are higher than new green building's in the first year of implementation (in Asia), but in the long run, the decrease of operating cost is not as significant as of the newly constructed green buildings.

    New Grade A Green Buildings reflect a sophisticated and modern image for both building owners and tenants. The cost of their construction is higher than standard buildings by ~10-15% but the rental fees charged to tenants is also significantly higher -- in Bangkok, the occupancy price / sqm / month can be up to 30% higher compared to other non green building of category A.

    Main challenges hampering green buildings growth in Thailand

    Developers : cost-benefit consideration (including the availability of material and energy solution which eventually relies on imports that increase overall cost)
    Government : lack of consistency and support in the execution
    Construction workers : lack of technical capacity and know-how
    Tenants : limited awareness of economic and health benefit
    However, despite the additional cost, building owner can acquire 20% more rental price compared to standard office buildings. Through savings on energy bills, investment on green buildings can generally be covered within 6 to 7 years.

    Green building key products by segment

    What makes a building "green"? Some technology and solutions are mainly preferred in the market -- LED lighting saves up to 60% energy, HVAC saves up to 30% energy and elevator system can save up to 35%. Combined with the implementation of building management system, higher energy saving is even more feasible to achieve.

    What green building trends would Thailand see in the future?

    Green building trends are taking off for both new and retrofitted buildings
    Green building will continue to be limited to commercial buildings in the coming year. Because in residential buildings, the trend to go green will increase developers’ initial cost and reduce their price point attractiveness, so buyers and investors of residential have yet to realize the true benefits of green buildings
    In the mid-term, cost of going green will go down as there are more solutions available in the market
    More comprehensive insights are disclosed within the "Thailand's Green Building Goals: Aspirations VS Realities" white paper which is free to download here.

    About Solidiance

    Solidiance is a dedicated B2B growth strategy and marketing consultancy firm with focus on Asia. The company has been helping Fortune 500 to expand revenues in Asia market through evidence-based strategic marketing advice. Solidiance's expertise is focused on industrial applications, green technology, healthcare and technology sectors. Solidiance has offices in eight different Asian countries: China, India, Indonesia, Malaysia, Myanmar, Singapore, Thailand, and Vietnam.

    Marketing contact information

    Sitaresti Astarini
    Regional Executive Marketing Communication
    Solidiance
    Email: pr@solidiance.com
    Company website: www.solidiance.com

    Photograph: Thailand’s green building sector is on par with other countries in the region, and the Ministry of Energy is launching new initiative to encourage building owners to make the necessary transformations to make their building green. Image: Shutterstock

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