Lawyers for potential tenants often advise clients that they should not make forward commitments to lists of rules but this is the basis for stipulating how a building can retain its maximum sustainable operational performance. Without this agreement about how to live in a sustainable building, all the effort to focus on efficient energy and water systems in constructing the building can gradually be undone or greatly eroded. This area should be one on which institutional property investors increasingly concentrate.
Buying a brand new Green Starrated building might be a marketing point but it comes with an expectation that the operational performance of this rating will be maintained and not disappear through lack of understanding about what is required to live in and manage such a building. The added responsibility for owners of sustainable buildings is the education process that goes with it.
There is a ripple effect in which everyone can win by being associated with a sustainable building but it also requires changing behaviour about building use and sometimes accepting that more expensive solutions are best for the longer term. Triple bottom line accounting, which balances profit, people and the environment, requires some understanding in relation to property investment.
As sustainable solutions can initially be more costly, profit needs to take on a longer term perspective to successfully meet the interests of all stakeholders and the wider community perspective. While the growing interest in sustainable buildings by institutional property investors is based on sound investment reasoning, it does require a longer term perspective. The reasoning is that sustainable property has better longer term value appreciation, principally because it attracts better quality tenants, becomes a more satisfying workplace for employees and has been constructed in a way that adds positively to the environment.
However, underlying this reasoning is the assumption that there is an ongoing commitment to sustainability throughout the lifecycle of the building and this is where greater emphasis is required. St Hilliers is a construction and property funds management group involved in the creation of sustainable buildings, with its most recent wholesale property fund involving REST and
First State Super as cornerstone investors.