Tenant demand is key to ‘greening’ Australia’s buildings

Within Australia there is a growing understanding that collaboration with tenants drives superior commercial outcomes for both landlords and tenants, and with an EUA now enabling this collaboration in environmental building upgrades financed using an EUA.

Australia is considered the most adversarial buildings construction market according to the AECOM global sentiment survey of 2012. With this in mind, relationships between landlord and tenant can take time. Those who take the time to develop these relationship promise to benefit from mutual commercial benefits from doing so.

An EUA as a tool has enabled early movers in the industry explore the commercial benefits of collaboration with their tenants., We we now see the nascent beginnings of a new global market developing as enabled by EUA with similar schemes in the US gaining momentum.and the green shoots of positive tenant landlord relations. Locally, this is being helped through a number of channels.

Facilitate a conversation.

Building Upgrade Tool has been developed by AECOM for Low Carbon Australia (now the Clean Energy Finance Corporation) and the City of Melbourne for the purposes of facilitating landlord-tenant engagement. This simple, web based tool models the financial relationship between building owners and tenants. While it doesn’t attempt to provide the definitive answer, it allows both parties to test how this investment might perform and commence a proactive discussion.

Get help to build your business case for your landlord.

Government initiatives like CitySwitch focus on creating tenant demand in the process of improving the performance of commercial buildings and are working in collaboration with municipalities offering EUA programs and EUA administrators, such as Sustainable Melbourne Fund for providing avenues to finance environmental building upgrades.

To assist organisations on their journey to become energy efficient, CitySwitch are offering grant funding to businesses signing up to CitySwitch in Victoria by December 31 2013. Up to $9,000 in funding is available per organisation (depending on tenancy size) to go towards the cost of a NABERS ‘green rating’ assessment.

Having rated 66% of Australia’s commercial office space already, The National Australian Built Environment Rating System (NABERS) is driving demand for improved environmental performance of commercial office buildings in Australia. NABERS is the basis of a mandatory disclosure policy for the performance of commercial offices in Australia (and is the envy of many mature commercial property markets across the globe).

A project that improves the NABERS rating of a building will deliver cost savings and an EUA is an elegant form of finance that enables building owners and tenants to occupy better performing buildings without spending any new cashflow of a building. An EUA allows you to spend money that you are already spending, just in a more immediately beneficial way to the people who occupy these buildings.

This mandatory disclosure, combined with the success of Green Star has led to the creation of the Property Council’s IPD Australian Green Property Index, which in its latest report found that Green Star rated assets delivered a total annual return of 10.6% and NABERS rated assets saw a 9.9% return both outperforming the total office sector, which delivered a 9.7% return.

Know your power.

Significant tenants such as large companies in single tenanted buildings can assist driving demand for the uptake of EUAs across the country while also delivering greater efficiencies to budgets with no up-front costs through reducing future risks of energy price rises.

As the economic fundamentals continue to change, retrofit technologies such as solar panels become cheaper and more businesses become aware of the potential energy savings and productivity gains to be made with energy efficiency or renewable energy projects.

Join the movement.

As the power of long term, cheap finance for comprehensive building upgrade becomes more widely understood; an EUA presents a sleeping giant of untapped commercial opportunities to improve the environmental performance of our cities.

Join our online discussion to gather information and elicit a change your building’s energy efficiency. It starts with you! Subscribe to our eNews, tweet @SMFAus or catch us on LinkedIn and let us know your pains and/or gains in your journey to energy efficient buildings.

Image credit: cattisb via Flickr Creative Commons


    Sustainable Melbourne Fund

    Enquire Now

    Complete the form below and our team will be in touch to discuss your project


    Why SAF is Right For You!

      Download More Information

      Complete the form to be emailed our detailed information pack

      Other Recent Articles


      How to maximise sales with compliant VEEC projects: Our best practice tips

      The Victorian Energy Upgrades (VEU) program is an initiative established by the Victorian State Government. The scheme aims to promote energy efficiency by encouraging households, businesses, and indu..


      Embracing Sustainability in the Hospitality Industry

      The hospitality industry increasingly faces a pivotal challenge: how do hospitality businesses become more sustainable while ensuring profitability? The hospitality sector, encompassing hotels, restau..


      Now Available

      New Fast Track Green Loan now available!

      Our new Fast Track Green loan will deliver more speed, greater flexibility, and extra choices for our customers.

      This includes:

      + Accelerated approval: With our Fast Track Green Loan, eligible businesses can secure up to $200,000 without the need to submit financials for faster approvals.

      + Fixed and Variable Rate Interest Options: All our eligible businesses can now choose an SAF green loan, including out Fast Track Green Loan with either a fixed or variable interest rate, providing the flexibility in funding you deserve.

      Find out more and apply today!