Whilst costs for developing green buildings in Thailand can be up to 20 percent more than traditional developments, returns on that investment are also higher.
A recent report from Siam Commercial Bank’s Economic Intelligence Center (EIC) noted the green building trend in Thailand is still growing, and is likely to continue in the future.
This trend, it said, is driven by the new Building Energy Code (BEC which is expected to come into force from 2019.
The two main challenges, according to the EIC, to developing green buildings in Thailand are a lack of consultants who specialise in developing green building, and the cost.
During the last 5 years, the number of buildings designed to be environmentally-friendly and that have passed international standards has grown from 55 to 240 at the end of 2017.
The main factors driving Thailand’s property developers towards green buildings, are rents that are between 20 percent and 25 percent higher, Floor Area Ratios (FAR) that are between 5 percent and 20 percent higher than the specified FAR in the Town Planning act, and reduced electricity and water costs that are as much as 30 percent lower.
Developing green buildings also requires higher quality building materials and energy management equipment which are both more costly.
These requirements increase green building development costs by about 20 percent on average, representing the main obstacle for developing green projects in Thailand.
The new Building Energy Code (BEC) enforcement will increase developing costs of traditional buildings by 5 percent according to EIC, representing an opportunity for developers to reach green building standard.
The requirement in the new BEC indicates that buildings with construction and renovation areas larger than 10,000 sqm (in 2019), 5,000 sqm (in 2020) and 2,000 sqm. (from 2021) must pass energy saving evaluations.
This is expected to increase project development costs by at least 5 percent.
EIC said the Royal Thai government should consider introducing new incentives to support green buildings as well as retrofitting old buildings to become green buildings.