North of Johannesburg, South Africa’s 30th Green Star Building to Implement Green Leases

A new office development in Johannesburg’s Sandton financial district is implementing environmental-related obligations into its commercial office leases with new tenants.

Let’s switch up our geographic focus for a moment and take a quick jaunt over to the other side of the world and check in with the first office building under construction at Alice Lane Offices, a 1.7 billion Rand mixed-use development in Sandton, a suburb north of Johannesburg, South Africa (pictured). The 200,000-square-foot tower is being developed by Abland Properties, which recently earned 4 stars for the project under the Green Building Council of South Africa’s (GBCSA) Green Star South Africa v1 program – the 30th building nationally to earn a Green Star designation. It should be ready for occupancy later this summer, with two more towers – including a 175,000-square-footer coming online in the fall of 2014 – in the works. Green features will include energy-efficient lighting, natural daylighting, and environment-friendly construction materials.

The three towers will be linked by a central, landscaped piazza slated to include a variety of retail components. The building itself will be one of the first in South Africa where a landlord has incorporated green concepts into its office leases. But it’s unclear exactly what those green lease terms include and how strict any rights or responsibilities running to either landlord or tenant might be.

To that end, Alice Lane is of interest because last summer GBCSA launched its Green Lease Toolkit, which noted some important trends in South Africa’s leasing climate, particularly with respect to “hard” green leases (where provisions may penalize a party for failing to satisfy certain green lease objectives). In terms of those types of leases under prevailing South African regulations, it noted “the absence of regulation governing the operational energy use of buildings means that performance-driven green leases with penalties are unlikely to be widely adopted in the short term.” However, the Toolkit did note that the South African Treasury has “indicated their preference for a carbon tax and the new building regulations include energy efficiency requirements. . . . Occupying and/or owning green buildings provide a buffer against these potential future regulatory changes.” So Alice Lane could be ahead of the curve.

In a press release, Abland lauded the Alice Lane project team’s engagement with future office tenants early in the design process, allowing each stakeholder to understand the benefits – and, presumably, risks – associated with the green building process. “From the outset, all involved in the development were aware of their roles, and the different benefits they would derive from the green building. Abland is very proud of having achieved this Green Star SA rating, and has committed to constructing the second and third buildings at Alice Lane as Green Star SA buildings, to create the first Green Star rated precinct in the area,” said Abland project manager Janet Glendinning.

The Alice Lane Offices development is located in Sandton City, Johannesburg’s financial district, with access to highways and the Gautrain station nearby. Nedbank, RMB, and JSE all have their office headquarters located within the district. GBCSA was established in 2007 and projects 60 Green Star-rated projects by the end of 2013. More than 400 Green Star SA accredited professionals in South Africa.

It’s been a while since we explored green leasing issues here at gbNYC. But we talked about the topic extensively over at GRELJ and encourage you to download our archive white paper on the subject here if you’re interested in diving into it in much more detail.

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  1. In Helsinki, Finnish Real Estate Concern Closes Its First Green Lease – - Wednesday, June 12, 2013

    [...] and regulatory changes that could be on the horizon closer to home. For example, you may recall our discussion earlier this year about South Africa’s first major green leasing foray, just north of Johannesburg at the Alice [...]