Environmental consciousness, increased responsibility in protecting the environment, and sustainable development are core values for more and more multinational and Hungarian companies, among them real estate developers and investors. An increasing number of tenants and investors on the Hungarian real estate market are therefore looking for so-called “green offices”.

Increased interest in green technologies

Green buildings are also known as green constructions or sustainable buildings, representing a relatively new type of building structure on the Hungarian real estate market. Green office refers to a building that is built and can be operated in a highly resource efficient and environmentally responsible way throughout its life-cycle. The aim of a green office is to minimise the environmental impact of the building (eg, by using sustainable, renewable energy sources; using geothermic heating and cooling systems; recycling rainwater; optimising operations and maintenance, etc.).

The green office concept represents not only a model of a resource efficient building but is also a symbol of high quality, a productive and healthy working environment, and a green and liveable atmosphere that can attract both investors’ and tenants’ interest.

The most common concern about green office buildings is the relative high construction costs. The high up-front costs stem mostly from the use of the newest technologies and environmental friendly “green materials”. The financial benefits of a green office come later, mostly as lower energy bills and maintenance costs. Reduced operation costs and high quality standards are the characteristics that make green offices increasingly popular among tenants and investors. This in-creased popularity provides alternatives for investors and future lessors on Budapest’s stagnant office market, where the vacancy rate is still high. Tenants are looking for green offices located in sustainable office buildings. Therefore, the submarket of green offices has a better lease ratio than the general market of conventional office buildings.

Legislation to induce construction of energy efficient buildings

Not only are the benefits of green offices recognised by investors and tenants, but the increased energy efficiency of buildings is an important part of the energy policy and legislation as well. In line with the EU-directive 2002/91/EC, the Hungarian government has introduced a unified energy performance assessment method by adopting Government Decree No. 176 from 2008 (Decree) on the certification of the energy performance of buildings, which promotes green development on the domestic property market.

Besides introducing the most prevalent and internationally recognised green building certification systems (BREEAM and LEED), the Decree also introduced a new, unified environmental measurement method and building certificate, apart from some minor exceptions with respect to all Hungarian office buildings. The Hungarian measurement method represents and incorporates emerging green building technologies and focuses on the actual energy qualification of the buildings. Based on this measurement method, the buildings can qualify for one of 10 levels of certification, from the worst “I” to the most energy efficient “A+” grade (eg, recent quality green office developments in Budapest).

Since the introduction of the Decree, obtaining an energy certificate is only required for the builder of a new office building, prior to actually using the building. Starting from 1 January 2012, however, green certificates must be obtained also in case of a lease of an office for more than one year, or in case of purchase. In case of lease or purchase, the owner must present the energy certificate to the lessee or the purchaser. The certificate is granted for a period of 10 years, solely by authorised experts as specified by the Decree. The fees for preparing the certificate are also defined in the Decree.

Sustainability: A major trend on the real estate market

It is clear that sustainability is a major trend on the real estate market. Real estate developers have begun to discover and use green certificates and the “green” status of a building as selling points. Tenants have also begun to recognise that renting a green office building is a mission statement about the environmental consciousness of the company.

The green office concept represents not only a model of a resource efficient building but is also a symbol of high quality, a productive and healthy working environment, and a green and liveable atmosphere that can attract both investors’ and tenants’ interest.