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Green Building Thailand : Key Drivers and Main Challenges

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.

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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 cost, as the accrued green cost is more difficult for individual, residential tenants to bear compared to the companies in the commercial buildings.

Key drivers for green buildings in Thailand

  1. Improving corporate image and CSR
    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.
  2. Lower operating costs with green buildings
    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.

greenbuilding report

The number of green building in Thailand has been growing rapidly since 2007, almost doubling annually between 2007-2012

 ‘Green buildings’ translate into higher asset value, which renders a higher rent charged to tenants

HIS market in other SEA countries such as Indonesia, Philippines and Vietnam, is currently still at its very early stages due to inadequate infrastructure support. The national and local health information systems are poorly integrated, weakly governed, and information gaps are still distinct. A lot of investment is therefore undoubtedly required in the healthcare industry to enable HIS penetration and the achievable growth.

“Due to lack of knowledge, insulations are
still deemed as trivial – the market doesn’t
understand the significance of insulation
installation on the building, there’s been a false
understanding that buildings in tropical areas
like most cities in Thailand do not require any
insulation. Insulation solution is also the least
prioritized because it does not provide any
visually tangible value-adds.”

Thailand Country head for a global building material provider

Main challenges hampering green buildings growth in Thailand

  1. Developers : cost-benefit consideration (including the availability of material and energy solution which eventually relies on imports that increase overall cost).
  2. Government : lack of consistency and support in the execution.
  3. Construction workers : lack of technical capacity and know-how
  4. 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.

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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 about Thailand’s Green Buildings Industry, download the complete version of the report directly here

Note: This article was written by Solidiance consultancy firm. The views and opinions expressed in this article are those of the authors and do not necessarily state or reflect the views of  Thailand Business News

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