The cost of building green office space in SA is steadily becoming more affordable, signalling an important shift in the commercial property market.
Between 2009 and 2014, green-certified office projects carried a significant cost premium, averaging 5.95%. Since then, that premium has steadily declined. According to the fourth edition of Green Building in SA: A Guide to Costs & Trends, projects certified between 2015 and 2018 saw the average premium fall to 3.49%.
The report was compiled by the Green Building Council SA (GBCSA), the Association of SA Quantity Surveyors (ASAQS) and the University of Pretoria.
The report shows that buildings certified between 2019 and 2021 pushed the premium down further to 3.15%, approaching the 3% mark that many industry players view as a milestone for broader adoption in the industry. Overall, the average premium since 2009 now stands at 3.63%.
Projects smash 3% barrier
“The 2025 report confirms that projects from 2022-2024 did not just dip below, but smashed, the 3% green building cost premium barrier with an impressive period average of 2.4%,” the report states.
The GBCSA said the escalated amounts of green building cost premiums are very widely dispersed, though 57% of the projects reported a premium of less than R15m.
Regional differences in cost premiums
The average green cost premium of 4.45% for projects in KwaZulu-Natal was about 33% higher when compared to projects from other provinces such as Gauteng and the Western Cape.
Property owners need to understand that certification isn’t the end goal. It’s more about how you prove that a building is actually performing in practice and on paper.
— Lisa Reynolds, GBCSA CEO
The report revealed a strong negative correlation between green cost premiums and construction size, with larger buildings achieving green star certification at a lower premium.
“However, the local green building industry has matured, significantly narrowing the gap between the premiums paid by large and small buildings. In 2014, the difference stood at 9.3% compared to 2.6%, but by 2024, it had decreased to 4.62% vs 2.43%,” the report states.
Certification builds confidence, not just prestige
“Property owners need to understand that certification isn’t the end goal. It’s more about how you prove that a building is actually performing in practice and on paper," said GBCSA CEO Lisa Reynolds.
"It gives owners, investors, and tenants confidence that a building will deliver environmental and financial value over time.”
The study confirms a modest and steadily declining green building cost premium, challenging the misconception that green building is unaffordable, said Danie Hoffman, the lead researcher at the University of Pretoria’s department of construction economics.
“The findings provide a scientifically sound metric for industry use. green certification also delivers superior operational performance, as consistently demonstrated by the MSCI property index,” Hoffman said.
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