In Estonia, there is an increasing number of office buildings and other structures with an energy efficiency certificate. Why has the popularity of this certificate increased in recent years and what does the application process look like? Representatives of three companies who have completed the journey of applying for a LEED (Leadership in Energy and Environmental Design) certificate in partnership with Forus, can explain it in greater detail.
Julius Stokas, the Head of Customer Experience of Mainor Ülemiste, was involved in the certification process of the Öpik buildings and the Alma Tomingas office building in Ülemiste City. Silver Neemelo, Construction Manager of Capital Mill, has experience in applying for LEED certification for several buildings over the last decade, and in partnership with Forus, their Skyon office building in central Tallinn was also awarded one. Meelis Šokman works at Green Formula Capital, which aims to increase the value of asset portfolios through green and sustainable projects; he has experience in preparing sustainability programmes for real estate, part of which is applying for a LEED certificate.
The idea of energy efficiency certificates has been taking root in Estonia for some time now; moreover, the increase in energy prices has given a practical dimension to the green way of thinking.
All three specialists of the field say that energy efficiency certificates have become comparable to a level of hygiene in case of new buildings. According to the representatives of both Ülemiste City and Capital Mill, they have implemented them in their development projects for years. Green Formula Capital has years of history, so Meelis Šokman also claims that the world has looked towards sustainable solutions for some time, and based on his past experiences, he has noticed that this is particularly true for Scandinavian markets. However, he states that rising energy prices have given a practical dimension to the green way of thinking in Estonia as well.
‘We can see that modern buildings must be energy-efficient and not waste resources,’ says Stokas. This was echoed by Neemelo, according to whom one of the objectives for the Skyon building in the initial design stage was a LEED certificate. ‘Outside Estonia, this is a well-known and valued certificate that provides an independent third-party confirmation that the building in question has been constructed and designed according to a set of recognised rules. By now, it has become an everyday part of construction and design for us. We believe that it increases the value of a building for everyone,’ explained Neemelo.
A certificate is a sign of quality of a building, offering assurance to tenants and a sense of certainty to investors. In the future, it could also lead to better financing conditions.
Everyone confirmed that the main advantage of an internationally recognised certificate is the assurance provided to the users of a building about the quality of the building being compliant with a certain set of standards. In the case of Ülemiste office buildings, Stokas pointed out that LEED certificates have provided them with the opportunity of being one of the pioneers of the field in Estonia: ‘Whenever an international company is looking for a new office – everyone knows the LEED certificate, making it possible to compare a building with buildings in other countries, for example.’
Šokman explained that international tenants prioritise such certificates because this is often internally required by the companies. ‘It is easier to offer a LEED-certified building to an international tenant because this label is unambiguous and widely recognised. An Estonian class A energy label might fail to ensure that you reach the next stage in a procurement held by an international tenant,’ he explained.
According to Neemelo, obtaining the certificate was an objective set to the Skyon project right from the start, and it was also clear that the demand for energy-efficient buildings has grown, and not only among international companies. ‘Environmental issues are increasingly relevant and go hand in hand with the green transition – the hottest topic in real estate for the next ten years. During lease agreement negotiations with our clients, many of them specifically asked for a LEED certificate. The tenants ask about a building having a LEED certificate before continuing discussions. Over the next five years, this is going to become the norm for new development projects,’ Neemelo gave an example.
Neemelo and Šokman mentioned the prospect of green loans as a potential positive trend, because these are increasingly discussed and green labels will definitely become more popular when these loans become a reality. Šokman gave the example that even though many banks talk about green loans, he is yet to see better terms and conditions being offered to green buildings in Estonia. ‘Once this becomes a reality, then the respective certificates are definitely a prerequisite for better credit conditions. This, in turn, would motivate owners to make more of an effort in this area, because major real estate owners see a large potential in sustainability for demonstrating that they value the environment and the well-being of people,’ said Šokman. He added that we should expect to see a situation where green loans lead to better credit conditions for certified sustainable buildings, and premises that do not meet these requirements are facing increasingly stringent terms and conditions. ‘Estonians are pragmatic and ask about the benefits that a LEED certificate would offer and the amount of euros it would earn them. In pragmatic terms, this might be the correct approach, but we should also think of the bigger picture. The benefits come from various aspects, so attributing a specific amount to it is complicated,’ Šokman explained. This was also mentioned by Neemelo – environmental topics are relevant, and with high energy prices, a certificate would assure future investors that a building has been developed pursuant to rules and agreements and the related expenses will be earned back in the future several times over.
Applying for a certificate is not complicated if you have set clear objectives. The process might differ somewhat, depending on whether a certificate is needed for a new or existing building.
Everyone agreed that the application process for a LEED certificate requires a joint effort from all parties, but if this is set as a goal in the initial stage of designing a building, the entire process is relatively easy.
According to Stokas, it is important that a building is designed with the appropriate solutions, because making certain changes later would be expensive. ‘Both the client and the contractor must be aware of the process and consider the possible impact on certification when making any changes or decisions during the construction process,’ he said.
According to Neemelo, including the entire project team in the LEED certification process in addition to the developers is important because decisions or investments concerning all parties must be made jointly to achieve the desired level. Based on his experience, he added that setting high goals in the initial stages ensures a better result during the LEED certification. ‘For example, we set a goal for Skyon that the high-rise should have as many windows as possible (the largest possible vision area), but due to the energy label, we modelled the open and closed vision with different ratios until reaching a balance point, where we achieved a great result in the certification process while retaining the vision as much as possible. If you are aware of this, then you can take it into consideration straight away and do not have to redo things later. As this is a regular process for us, we were able to predict such situations,’ he explained.
Šokman pointed out that the process of certifying a new building has certain peculiarities compared to certifying an existing one. ‘The energy class requirements in force offer a lot of support to the certification process. When it comes to parameters, every new building already complies with a lot of the requirements, but to obtain a certificate at the highest possible level, the requirements set to documentation must be met, various solutions for materials must be considered, and other such aspects must be taken into account. In the case of existing buildings, documentation is easier because it already exists. You will be notified of the points that you earned, but then, you must start to think about investments that would help to improve the result. In the case of new buildings, the issue is not the possibility of earning a certificate, but the level achieved – is it Gold or Platinum? Achieving the Platinum level with an old building is complicated,’ Šokman explained.
Fortunately, developers or project teams are not alone when applying for a certificate and involving specialists in the field simplifies the process to a significant extent. ‘Forus can help a lot as an adviser, but it cannot do everything for the owner of real estate. It takes commitment and the owner must be there when Forus presents its results and proposals,’ Šokman said.
Regardless of the increasing demand, the leaders in the field who have made this issue a priority in their companies are currently the ones to promote green buildings, when in fact, we must all make a joint effort to avoid wasting our resources.
Šokman pointed out that the Estonian market has a long road ahead in this domain, and currently, the responsibility is largely borne by the leaders of the real estate market. According to Neemelo, Capital Mill has emphasised for years that their buildings must meet the highest standards, including in sustainability. ‘We have decided that this is an important aspect of real estate development for us, but I guess everyone must find their own values and priorities,’ he said. Based on the experience of Ülemiste City, Stokas stated that we should absolutely do our best to make sure that buildings with a life span of 50+ years would not waste resources during this period because ensuring better conditions for future generations must be our joint endeavour, and a LEED certificate would definitely help to achieve this goal.
Click here for more information on LEED certificates.
