TORNADO FINANCIAL DEVELOPMENT COST ANALYSIS FOR GREEN PROJECT IN MALAYSIA

Abstract

In Malaysia, green building has currently become significant as sustainable development. Most of the established developers have incorporated sustainable development in green building projects. Due to the passive evolutionary effects of real estate on the environment and human health, the development and promotion of green buildings for a sustainable environment have become a market trend to attract buyers in this country. Thereby, the qualitative approach methodology is adopted in this study, where a case study has been selected to observe the significant risk impact on the development cost. An in-depth analysis was carried out using a feasibility study, and a discounted cash flow was performed. The simulation runs using tornado analysis to detect the most significant risk affected by development cost. The results indicate that the building cost, mechanical and electrical works, and piling works are the highest risk in developing a green building. Therefore, the client should take extra precautions in green development to monitor the affected cost to minimise project delay and achieve the project objectives. A tornado analysis makes decisionmaking more explicit by the client. It enables the decision-maker to analyse the risk contributing to the development cost and make more effective decisions.