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Turkey 2014 | REAL ESTATE & CONSTRUCTION | FOCUS: GREEN BUILDING INITIATIVES

Green buildings offer up the opportunity for rapidly expanding economies to cut down significantly on energy bills, and Turkey is beginning to catch on.

Turkey has begun to see the benefits of green buildings, with the impact on the current account deficit (CAD) of growing energy imports a prime driver for the initiative.

The green building initiative is primarily a private-sector concern in Turkey, with the public sector yet to step into the game. In that respect, Turkey took its baby steps in 2008, when the first Leadership in Energy and Environmental Design (LEED) Gold Certificate was granted to a Siemens factory in Gebze, Kocaeli. And since then, progress has been impressive; 19 LEED and 20 Building Research Establishment Environmental Assessment Methodology (BREEAM) certificates had been granted as of mid-2012, while 80 others projects were awaiting green building classification. And those buildings are spread across a variety of sectors, including malls in Istanbul, Ankara, and Erzurum, industrial facilities including those of BASF Chemicals and Turkish Airlines Engine Center Istanbul, hotels and restaurants, including Hilton Inn Golden Horn and Baylo Suites, office buildings, as well as Unilever Turkey and Tekfen Levent Office, and non-commercial buildings, such as Piri Reis Maritime University, the Küçükçekmece District Municipality in Istanbul, and residences such as the Varyap Meridian in Istanbul.

The initiative is spearheaded by the Turkish Green Building Association (ÇEDBİK), which was established in 2007. With more than 100 members, the organization held its first annual international green building conference in 2012.

According to a report by Agentschap NL, high initial development costs are the main deterrent to developing green buildings, although it is estimated that the additional cost is only 7%-20%. When complete, green buildings then consume between 25% and 40% less energy and 40% less water, while also generating 70% less waste. The report also points to banks that have been keen to get involved in financing green building initiatives, including TSKB and Vakıfbank, while several international financing companies are also keen, including EBRD and the IFC. On the regulatory front, a regulation on building energy performance stipulates a minimum energy performance standard and independent energy auditing for buildings over 1,000 sqm in size.

The Agentschap NL report also underlined Turkey's current building stock, estimated at around 19 million units, a figure that is expected to grow by 600,000 every year until 2023, adding 7.5 million more units to the stock, while a large chunk of existing stock is also undergoing renovation; approximately 48% of building stock is more than 35 years old. And with urban renewal at the top of local council agendas across the country, the Ministry of Energy and Natural Resources has estimated that as much as 30% could be saved on energy bills if redevelopment is done right, thus saving the country millions on imported energy costs and helping to reduce the current account deficit. But there is still a long way to go, with the sector in desperate need of lower utility costs overall, better access to financing, more subsidies, and more beneficial asset valuations for green buildings. The sector itself can be lucrative, with the global green housing market alone passing $50 billion in value back in 2010, and expected to reach $120 billion in 2015.

The benefits of green buildings are clear, but the market trend is toward building green rather than converting later, and a lack of public-sector involvement is holding the issue back at drawing boards across the country. However, the sector has significant growth potential and, with the government looking to reduce energy imports, green buildings are likely to be on the lips of many a developer in the coming years.