While institutions are keen to own sustainable buildings, what is not widely appreciated is that the Green Star credentials, awarded for the building structure, is only the first stage. A building then needs to be managed and maintained with sustainability top of mind, writes RALPH GAGLIANO, executive director of St Hilliers Group. In days gone by, the focus of many discussions about property investment was location and yield and it would have seemed outlandish to talk about the environmental footprint of a building and whether it was energy efficient.
The prevailing ideology was guided by historic, comparable sales data and if a property was well located and had a good return from a sound tenant then it was, by definition, a good long term investment. Today, however, institutional property investment decisions are increasingly influenced by environmental, social and governance factors and the long term sustainability of buildings. In a sense, the investment decision making focus has widened and moved from historic data to a view about the type of building that will be more in demand in the future.
While historic sales data, yield and location are still relevant, the Green Star rating and environmental efficiency of a building is becoming increasingly important. What also needs to be appreciated is that a building achieves a Green Star rating for its structure and to benefit end-users should be utilised in accordance with its Green Star design. Therefore priority must be given to the management and maintenance of the building ensuring its on-going sustainability.
Sustainability ratings of buildings come in two forms – Green Star ratings from the
Green Building Council of
Australia, which relate to the construction of new buildings, and NABERS (National Australian Built Environment Rating System) Energy ratings for existing buildings. The Green Star system assesses, in the Council’s words, “the environmental impact that is a direct consequence of a project’s site selection, design, construction and maintenance”.
In terms of creating these buildings, the process can be fairly straightforward, although in some instances it can mean taking a more costly option to achieve longer term sustainability. Two key factors that are the determinants of Green Star ratings are the efficiency of power and water, with consequent implications for air conditioning, lifts and lighting. Renewable energy is able to be utilised for some building power but the greater emphasis is on technology that contributes to a lower consumption of energy.