Green Race: Office Environmental Certifications Are No Longer Optional

The race for green certifications like LEED and EDGE is accelerating in Mexico and Brazil, where sustainability has become essential for standing out in an increasingly competitive real estate market.

Sordo Madaleno Arquitectos, led by Javier Sordo Madaleno, developed Antara Corporativo. Photo: SiiLA.

By: SiiLA News

11/13/2024

While not mandatory worldwide, companies and organizations lacking environmental strategies risk falling behind. Climate change and potential economic returns from operational efficiency and sustainability-linked financial benefits, such as green bonds, are driving the evolution of environmental, social, and governance (ESG) standards from a trend to a necessity.

Commercial properties in major Latin American real estate markets, including Mexico and Brazil, are increasingly seeking sustainable certifications to attract investors and tenants.

According to data from SiiLA Market Analytics, Mexico's leading office markets—including Mexico City, Guadalajara, Monterrey, and Querétaro—currently have at least 175 Class A+, A, and B buildings with green certifications, including Antara Corporativo and Century Plaza, located in Mexico City's Polanco and Santa Fe submarkets. In Brazil, its leading corporate markets—São Paulo, Rio de Janeiro, Porto Alegre, Curitiba, Campinas, Brasília, and Belo Horizonte—house 212 certified office buildings, including the JK Complex–Torre Santander and 17007 Nações–Torre Sigma.

For Sandrino Beltrane, Head of Business Development in Brazil for the U.S. Green Building Council (USGBC), sustainable certifications are crucial for demonstrating corporate commitment to environmental and social welfare and improving financial efficiency. Sustainable features enhance property values, reduce operational costs, and attract environmentally conscious tenants, increasing marketability.

"Green buildings are a global solution for cities, communities, and neighborhoods. They can reduce carbon emissions, energy, and waste consumption, conserve water, prioritize safe materials, and reduce our exposure to toxins," Beltran explains.

Green Certifications: Key in Real Estate

Reforma 222, a mixed-use building in Mexico City, renewed its LEED certification in early 2024. Photo: SiiLA.

The USGBC is the organization that grants the LEED (Leadership in Energy and Environmental Design) certification, the most widely used green building standard worldwide. Since 2000, more than 197,000 projects worldwide have received this recognition. Currently, the United States and China lead the list of countries with the most certified properties, while in Latin America, Brazil, Mexico, and Peru stand out.

Looking ahead, the diversification of certifications is expected to attract more projects that respond to the growing demand for sustainability in the commercial real estate market. Beltrane notes that the USGBC is about to launch a new version of its certification, LEED v5, to address the rising demand for sustainable solutions. This update aims to align the "built environment" with "critical imperatives" such as decarbonization, ecosystem conservation and restoration, equity, health, and environmental resilience.

In addition, many other environmental certifications worldwide, such as Canada's BOMA BEST and EDGE from the International Finance Corporation (IFC) of the World Bank Group, promote sustainable building practices tailored to different contexts and market needs. This means that, beyond the certification type or even the certificate's presence, there are many more sustainable properties than are officially recorded.

Although approximately 36% of office buildings built and monitored by SiiLA are certified in Mexico, many other properties also have sustainable features. Data shows that Mexico City and Guadalajara, with about 40% of their properties certified, outperform other vital regions such as Monterrey and Querétaro, where certification rates range from 13% to 19%.

This suggests a heterogeneous adoption of certifications across the country, likely influenced by the types of industries and their carbon footprint reduction needs in each area, illustrating how sustainability demands impact the real estate sector differently.

Since 2005, properties in Mexico have received LEED certification. That year, the Centro Internacional de Negocios in Ciudad Juárez, Chihuahua, became the first building to receive this certification nationwide, under the LEED BD+C (Building Design and Construction) classification. Since then, hundreds of corporate buildings have earned this recognition. In the past year alone, at least 20 office property owners sought certification. One of the most recent projects to receive it was the office segment of the mixed-use complex Reforma 222 by FIBRA Danhos in Mexico City, which renewed its LEED Gold certification in May 2024.

To learn more about commercial real estate trends in Mexico and Latin America, visit SiiLA REsource or contact us at contacto@siila.com.mx.

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