This was first published in The Business Times on 24 Jan 2019
Much has been said about environmental sustainability, with banning drinking straws just the latest hot topic. But much less attention has been paid to the role real estate plays in driving the sustainability of a country, one which is aligned with the government’s vision of a smart nation in which citizens live meaningful and fulfilled lives, enabled seamlessly by green technology.
Singapore’s real estate community has been slow to adopt innovation in property technologies (“
The sustainable buildings agenda is currently being driven almost entirely by the government. Singapore’s green building movement, launched in 2005, has a target of making at least 80
For Singapore to achieve its green building targets, policy measures and market interventions that could create demand for sustainable buildings will be key considerations. Such measures need to target both developers and occupiers of commercial, retail, residential and institutional buildings.
However, until there exists a direct correlation between a building’s sustainability and its occupancy, rent and valuation, greening of buildings will remain a top-down agenda.
To create a market-driven agenda, the government needs to incentivise the private sector for players to step up to the plate. This would then allow the government to gradually shift its role from prescription to setting up and monitoring of sustainability standards.
Singapore can approach this agenda from four different ways.
Firstly, the government can do more to spur the debt and equity capital markets to support green loans and mortgages.
Already, Singapore banks are actively exploring green loans for developers and asset managers.
Added measures from the government could take the form of a five
Secondly, more can be done to stimulate supply and demand for green buildings.
Furthermore, to create a market premium for green buildings, a 50
GST rebates for green residential developments and an exemption of GST on the import of green-related equipment and raw materials will also help to alleviate operating costs.
To promote green adoption, owners of green buildings should also be allowed to claim commercial building allowances on capital expenditure which would otherwise not qualify for capital allowances.
To create the necessary demand for green buildings, a 250
Thirdly, the government can step up efforts to encourage existing property owners to turn green by giving a 200
To sweeten green adoption, a 50
Direct grants and extension of commercial building allowances to owners that retrofit existing properties into green buildings will also help to enhance the traction to go green.
Fourthly, the private sector should also be
As an example, private players can use augmented and virtual reality to enable architects to
They can also explore building materials like bricks made from waste, windows that convert light into electricity, and building management systems incorporating artificial intelligence and drones to enhance energy saving, ventilation
Grants and assistance to co-fund 50
In addition, to drive
To conclude, the success of a greener, more sustainable real estate sector in Singapore depends not only on government initiatives but also on the private sector and society. At a time when the real estate sector seeks to reposition itself to stay relevant, a concerted focus in these four areas would certainly accelerate its transformation and make green buildings the defining feature of a smart and sustainable nation.
The article was contributed by Tay Hong Beng, Head of Tax and Real Estate, KPMG in Singapore. Views expressed are his own.