1200 Buildings: the progress so far

The City of Melbourne’s 2013 report on the 1200 Buildings Project checks the pulse for green retrofitting in the CBD. The key finding is that while uptake has been healthy so far, demand tends to be sporadic and prompted around the time of heatwaves and the renewal of rental leases for office buildings in the CBD.

It also highlights an inherent problem of economic incentive: the end users of green retrofitting are tenants, while the people best placed to install retrofitting are building owners. This is reflected in the data showing that corporate-owned CBD buildings are the largest group of retrofitting customers. Indeed, 28 per cent of all surveyed suggested that this “split incentive” was keeping them from retrofitting.

As Michele Leembruggen, senior Sustainability Officer at the City of Melbourne, explained to The Fifth Estate earlier in January, “earlier research undertaken through the 1200 Buildings Program into the drivers and barriers to retrofitting by commercial buildings – both corporate and private owners – found that the propensity of private owners to spend capital was limited and that plant failure was the major trigger for retrofitting in all ownership segments.” Indeed, “private owners often do not have the corporate structures and resources to research, facilitate and track building performance. They do not proactively manage building performance and want to see cash flowing into their businesses, not out.”

The report also finds a trend towards clients undertaking multiple retrofits, or a retrofit “program,” rather than a one-off retrofit. This is encouraging because economies of scale spread out the cost of upgrading while the more comprehensive programs deliver greater efficiency gains. Encouraging too was the finding that 52 per cent of survey respondents perceived retrofitting in terms of an investment, while only 28 per cent perceived retrofitting in terms of a cost. Of those undertaking a retrofit project, over half perceived them as either driven by energy efficiency or improved tenant appeal. The survey also noted that that over the 5 year period (2008 – 2013) 25% of 1200 Building Program participants had retrofitted with a further 32% expecting to undertake retrofitting within the next 5 years. Of the retrofitting completed, 83% undertook lighting upgrades 59% upgraded building management systems and 54% upgraded the chiller units.

Potentially the most significant finding was that a perceived lack of “access to finance” was the most commonly stated obstacle to a building retrofit (35 per cent). This is a positive finding in the sense that this is a challenge that Sustainable Melbourne Fund can help to overcome with City Of Melbourne’s Environmental Upgrade Agreement (EUA) finance model. The key seems to be getting the word out to building owners/occupants, managers and property professionals.