License article

It's easy being green

AUSTRALIA'S commercial property sector has marked the first anniversary of compulsory energy-efficiency disclosures, with just two non-compliance orders issued among almost 1300 transactions.

More than 200 assessors now operate nationwide to determine the energy-efficiency rating of commercial office space whenever at least 2000 square metres is leased or sold. All up, more than 7 million square metres of office space - including hotels and retail sites - have been rated in the past year. The government won't disclose the identities of the two offenders, preferring to stress the fact that disclosure has become routine for the industry.

''These investments are seeing real returns in the marketplace, with energy-efficient buildings being cheaper to run and attracting better rents and property prices,'' the parliamentary secretary for climate change and energy efficiency, Mark Dreyfus, said.

Some of the biggest players, such as Mirvac, Investa and DEXUS, say the industry has taken in its stride the move to make the National Australian Built Environment Rating System (NABERS) compulsory.

Andrew Butler, Mirvac's chief executive of investment, said his company's portfolio of buildings now had an average rating of 4.3 stars, ahead of its goal of four stars by December.

''The property industry is naturally competitive, and increasingly we are benchmarked on our NABERS and Green Star credentials,'' Mr Butler said.


''There is no doubt that legislation has been a major driver in the property industry.''

Michael Lane, the general manager for corporate responsibility and sustainability at DEXUS Property Group, said the company's portfolio of about 20 buildings had gone from an average star rating of about three when it began NABERS work about three years ago to 4.3 now. It has a target of 4.5 stars by December 1, with DEXUS spending about $31 million to meet the goals. Its rival, Investa, aims to achieve a minimum rating across its portfolio of 4.5 stars - which is between ''good'' and ''excellent'' - in the NABERS scale. At present, the average over 42 certificates is 4.2 stars.

''From submission of the completed [Building Energy Efficiency Certificate] application to receipt of the certificate, we usually received ours within a couple of weeks,'' said Investa's Shaun Condon, the company's head of environment and safety.

Robin Mellon, the executive director for advocacy at the Green Building Council, said the mandatory rules marked a shift in the industry: ''It's been an incredible change over the past year, and a positive one.''

Mr Mellon said he wasn't surprised that activist groups, such as the Climate Institute, view the commercial property sector as relatively advanced in addressing the risks of climate change. Apart from the long-lived nature of the assets, owners or tenants of commercial offices see the benefit of improving the working conditions of their employees - an outcome that usually results when engineers focus on energy-efficiency measures.

''The biggest annual expenditure is likely to be salaries,'' Mr Mellon said. ''So if you can improve productivity by 5 or 10 per cent, because of the environment they are spending the most time in, it's going to have millions of dollars in savings.''

However, the Green Building Council, itself celebrating a decade of operations this week, is developing an extension of the energy ratings to include a gauge of a building's greenhouse-gas emissions. Mr Mellon cited a theoretical example of a building off the grid, supplying 100 per cent of its energy needs from renewable sources, but with only a poor efficiency rating.

''Why does it matter how energy-efficient the building is,'' he asked. ''It's much more important to consider the greenhouse gases associated with that energy.''

Dexus's Mr Lane said his company already collected emissions data by building but released it only at the portfolio level.

He said ''there'd be no issue with publishing'' such details for each building but he would first wait to see details of the Green Building Council's plan.