Green building premium: why Zim’s buildings can’t afford to stay brown

Mike E. Juru

WITH all that has been said about green building, it’s time to share the process involved in getting a building certified green but before that; picture a new industrial park on the outskirts of Harare, two warehous­es sit side by side. Both are 5,000 sqm. Both were built in 2024 for $3.5 millioån. One has a tin roof that radiates heat. The other has an EDGE certificate, insulated panels, skylights, a 150kW solar roof and rainwater harvesting capability.

The brown warehouse lease for $4.50 per sqm. The green one leases for $5.20. Its vacancy is zero. Its tenant, a South African retailer, pays a 15 percent premi­um because its head office ESG policy forbids leasing non-certified space. Our market now has discerning tenants.

That $0.70 difference is worth $42,000 a year. Capitalised at 9 percent, it is $466,000 of additional value. The green certification costs less than $50,000.

This is the math Zimbabwe’s prop­erty market is waking up to – just as the government gazettes new harmonised building codes and enforcing abatement orders.

In a market where green certification is not yet mandatory, the question is no longer “why certify?” It is “can you afford not to?”

Why certify when the law doesn’t force you?

In London or Nairobi, you need BREEAM or Green Star to get planning permission. In Zimbabwe, EDGE, LEED or Green Star certifications are voluntary. Which is exactly why it is powerful.

Voluntary certification is differentia­tion. And differentiation is where profit hides in a flat market.

Four reasons banks, REITs and pen­sion funds should be demanding it:

1. The Bankability Factor: RBZ-reg­ulated banks are adopting IFRS S2 Climate Disclosure. IPEC is pushing pension funds to report climate risk. A brown building is now a risk asset. We hear two of Harare’s largest banks have confirmed they will price mortgages and development loans 50-100bps cheaper for green-certified buildings. Green certi­fication is no longer CSR. It is credit risk.

2. The Tenant Mandate: Multination­als, telecoms and diplomats – the tenants who pay on time and in USD – have glob­al net-zero commitments. International organisations including and all UN agen­cies must occupy certified space by 2030. If your building is not green, you are au­tomatically excluded from 40 percent of Grade A demand.

3. The Abatement Shield: Under the new Building Codes and the ongoing abatement blitz in Harare and Bulawayo, brown buildings are being served with compliance orders that cost $50,000- $500,000 in retrospective fire, energy and accessibility upgrades. A building pre-certified under EDGE Operations or Green Star Existing Building Perfor­mance is largely abatement-proof. Certi­fication is insurance.

4. The Value Premium – The Valuer Finally Has Data: For years valuers dis­missed green as “intangible”. Now we have data. The global statistics are there for all of us, they confirm:

– Green-certified offices: 12 percent rental premium, 8 percent yield compres­sion

– Green warehouses: 18 percent lower operating costs, 25 percent lower vacancy

– Brown buildings post-abatement: 15-25 percent value write-down for Cost to Comply

In valuation terms, green is no longer a fad. It is a material valuation input un­der IVS 2025.

The process: how to certify when no one tells you how

Before we get onto it, allow me to refresh for you the definition of a green building, it is a building that by its design, construction, operation and decommis­sioning reduces its impact onto the en­vironment. This is a deliberate initiative, and this is where most developers fail. They think certification is a plaque you buy at the end. It is a process you design from day one.

For a country like Zimbabwe where we do not have our own building rat­ing and certification tool yet. The Green Building Council of Zimbabwe is avail­able to provide guidance on the best op­tion depending with the organization’s goal. However, currently, the fastest route is EDGE

EDGE (Excellence in Design for Greater Efficiencies) is IFC-World Bank, audited locally by Green Building Coun­cil Zimbabwe experts and certified for around $12,000-$25,000 depending with the building typologies and size and this is actually the cheapest in the market.

The 5-Step Process:

Step 1: Feasibility – Cost $0

Run your existing or proposed design through the free EDGE App. If you can hit 20 percent savings in energy, wa­ter and embodied energy vs a baseline brown building, you qualify. In Harare’s climate, almost every building qualifies with LED, insulation, low-flow fittings and a small solar array.

Step 2: Design Audit.

Appoint an EDGE Expert (there are now 12 in Zimbabwe) and EDGE Au­ditor. Expert redesigns MEP to hit 20%+ savings. This is not expensive redesign – it is swapping glass, adding roof insu­lation, specifying low-flow taps. Cost: $5,000-$10,000.

Step 3: Registration

Register project with GBCI or Sintali. Pay registration fees.

Step 4: Construction & Evidence

Build as designed. Auditor tracks in­voices for compliant materials, photos of insulation, commissioning certificates. This is critical – greenwashing fails here.

Step 5: Certification & Operations

Submit to GBCI. Site audit. Receive EDGE Certificate – Design and then As- Built. For existing buildings, use EDGE Operations – 12 months of utility data + audit. Total time: 3-6 months for new build, 2 months for existing.

Total cost for a 2,000 sqm commer­cial building: $18,000-$28,000. Payback: 14-24 months from energy savings alone, before rental premium.

The bottom line

In markets where green is mandatory, certification is a cost of compliance. In markets like Zimbabwe where it is volun­tary, certification is a competitive moat.

The first movers are already charging the green premium. The rest of the mar­ket will pay the brown discount: lower rents, higher voids, abatement orders, and ultimately, lower valuations.

The Valuers Council said it best in its summer school theme: “Valuation at the Centre”. For the first time, valuation is not just about bricks. It is about wheth­er those bricks will be investable in five years.

In a warming world, a brown building is a stranded asset. The plaque on the wall is not decoration. It is a valuation certif­icate.

l Dr Juru is the current chairman of the Valuers Council of Zimbabwe.

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