Green leases will pay off, landlords told

Developers can boost rental income from commercial tenants by about 10 per cent, the Green Building Council said yesterday as it released guidelines showing how the concept can be made a reality.

A green lease places obligations on both a landlord and tenant to improve the environmental performance of a property, for example by cutting energy or water use. A landlord may pay the upfront cost of improvements while a tenant would have to record environmental performance and agree to take steps such as keeping temperatures at a set level.

The leases are common internationally, but so far the only Hong Kong organisation to make use of them is the Science and Technology Parks.

The guidelines include sample letters, procedures of monitoring energy usage and suggestions on how to reach agreement with tenants.

The council's director, Dr Benny Chow Ka-ming, said more than half of the city's electricity was used in commercial buildings, of which more than half went on air conditioning.

"From the United States experience, the rental income from offices with a green lease is 8 to 10 per cent higher," he said. "These offices will enjoy cheaper bills for electricity and water usage and a reduction of employees' sick time by 5 per cent."