11 November 2010 – Favourites: Siobhan Toohill is the highly regarded sustainability leader for Stockland. We first interviewed Toohill in May last year for the first in a series of profiles of high achieving women in the sustainability field. So, more than 18 months later what’s the view from the Stockland camp? As one of the country’s biggest developers with a broad portfolio, where Stockland goes the property world could well follow.

Chief executive officer Matthew Quinlan is known for his forthright views, and he’s happy to take on the sustainability challenge. In housing earlier this year he threw a spanner at the conventional wisdom that says houses have to be a minimum (large) size. Want affordable housing? he asked. Then just make the houses smaller.

He pointed to the one-day sellout of its Highlands Estate at Craigieburn, north of Melbourne where a batch of 10 houses, each of 144 square metres, sold for only $269,000. (See article here)

Today Stockland is working on changing the view that smaller houses will lower the tone of the neighbourhood.

There is also work on alternative energy, and not just solar – demonstrated by a recent announcement over a huge array in its Shellharbour shopping centre expansion on the NSW south coast – but in wind energy.

In social sustainability and the residential sphere, the company has undertaken a small revolution in the way that it conducts its assessment of potential projects, in part a result of the long-running dispute with residents at the company’s Sandon Point project near Wollongong.

But there is also now tougher assessment of direct climate risk, such as flood or fire. Toohill is at the forefront of that work, and today her team is expected to put a site through the sort of risk assessment that was unheard of a few years ago.

“Certainly I work closely with our strategy team and I … work closely with our risk team,” Toohill told The Fifth Estate in a recent interview. “I see sustainability should have a very close relationship to group risk and group strategy, and that hopefully each of our three teams should actually be very much aligned.”

This scrutiny may well eliminate projects that might have sailed through the due diligence process five years ago, she says.

Another more unusual item that’s emerged on her team’s workbook is to assess stakeholder issues. For instance, are there key stakeholder groups that would be deeply resistant to any kind of change in that local area? Toohill admits Sandon Point has a lot to do with that side of the risk assessment. “It continues to be a challenging project, and we continue to engage with our stakeholders on that project,” she says.

And if this sounds like a learned response, Toohill also points out that wide discussion of the problems is contained in the company’s sustainability report. “It’s important that we keep talking about what our experience and what our position is on that project,” she says. “But I think it’s a very difficult project with stakeholders who have taken a very firm view, and yes, it’s a very, very difficult one to turn around.”

The experience means that Stockland will now go “quite a long way” to understand stakeholder groups in relation to projects. “So we now have stakeholder engagement plans in place for every single project asset in our business. And that’s something we’ve rolled out in the last 18 months. Because what we’ve come to realise is that if we actually plan for understanding our stakeholders and what their concerns and needs and interests are, then we can go a long way to actually understanding them. And most critically, it’s stopping and listening to them, talking to them and letting them have a voice.”

At the Selandra Rise Estate south-east of Melbourne, community consultation changed the project. Toohill refers to the process as a “co-creation”. “We’ve learned a lot of lessons from tough projects over the last few years where, in hindsight, we could have gone further to engage local communities earlier.

And we’ve learned the lesson that the earlier you engage, the more straightforward that relationship is going to be, the more involved the community feels, and the more of a voice it feels it can have in that project.” It might take a lot more time up front, she says, but the benefits are absolutely there.

“Often your biggest customer base for a residential project are the people who are living in the surrounding community. And often they’re the people who’ve got a fairly significant voice in council, local government. This stuff, when you think about it, it’s pretty much common sense.”

Toohill says that living in inner-Sydney Newtown has given her insight into what resident action groups might be thinking. “In Newtown … I’ve got access to great public transport, great retail, great education. It’s fabulous. But do I want a big apartment building going up next door to where I live? Probably not. You begin to actually understand where people are coming from. People don’t like change in their immediate communities. People want what they’ve bought into. They want it to stay the same.”

In a new community, being smarter about what the community wants has led Stockland to incorporate infrastructure such as retail or educational infrastructure right up front. Doing so means “you’re actually feeling that sense of community straight away, and there’s real benefits to those people who first move into that project.”

That greater connection also extends to the “soft” infrastructure of helping to establish neighbourhood connections such as intranets, says Toohill. In fact community development managers are being hired in all of Stockland’s state locations.

In commercial property, social sustainability translates into thinking about local employment generation. “It’s a strong message that we’re sending to our contractors that they do look to the immediate community and, where possible, with people who have been unemployed, getting them back into work.”

It all makes sense and helps strengthen the property asset.

“When you’re supporting local jobs, you’re actually creating a local community that is going to be more resilient, a more successful, prosperous local community, if you’re providing and injecting more jobs into that local community,” Toohill says.

This thinking extends to supporting retailers and dealing with the security issues that can arise from shopping centres.

Balgowlah
Another tough lesson for Stockland was at Balgowlah. In this case, which involved years of delay through the planning process, the end result was that Stockland told the world it would pull out of apartments altogether. Everywhere, across the board.

“For us, we learned a lot of lessons out of Balgowlah where we delivered apartments and a retail centre, and so a mixed-use project in a middle-ring suburb,” Toohill says.

“For us it’s a really, really wonderful project. The feedback now coming from locals in that area is that they love the retail centre. But that project also came with a lot of heartache along the way. It took a long time for that project to come out of the ground, to get all the approvals. There was a lot of community resistance, and also a lot of local government resistance on that project.

“The lessons learned on that project is that getting these sorts of projects approved in all middle-ring suburbs is really, really hard. And for us to get returns on a project like that is extremely challenging. … So for the time being, we’ve said, for us, also the lessons learned on apartments on that project too, it’s just too hard. So for the time being, we’re out of that game.”

Housing
According to Toohill house sizes need to be smaller to be more sustainable. “I think the worm has turned on house size, for us, which is great because it does align very nicely with delivering more sustainable homes, more energy-efficient homes,” Toohill says.

One thing the company is working on is influencing partner builders, to “make it easier for them to deliver low carbon housing.”

Are the buyers choosing more sustainable features yet? “The feedback that we have is people want to, but it doesn’t always translate to what they actually do.”

Toohill liked a comment by AV Jennings’ national design manager John Eckert who said, “You can have a 10-star house but a one-star occupant”. “It’s a fabulous quote. And I think sadly there’s a lot of truth in that.”

Commercial
What about the commercial front? What are the big waves on the horizon?

The Prime Minister’s Task Force on Energy Efficiency for one, says Toohill. “Part of me said, ‘Oh, no, I can just see so much more regulation here’,” says Toohill, referring to a recommendation that minimum performance standards for existing buildings be considered.

“On the other hand, I thought really exciting things are being considered here as well.” Such as distributed energy and “understanding that zero [carbon] needs to be on the table,” she says.

“I don’t think everyone’s entirely clear on what the pathway looks like for us to get towards zero, but I think it’s an important aspiration. But as we talk about the aspiration, I think it’s really important that we recognise that there are three players, probably four players,” she says, nominating property, government, utilities and researchers – by which she means agencies such as CSIRO or university researchers – “people who can help us with the technology.”

“We’ve got to find ways we can work together really effectively. We need government to unblock the regulation in this space; we need the researchers to come up with the technology; and we need the utilities to come on board with us. At the moment, the utilities aren’t really incentivised to explore this area. So you actually need all four groups to be aligned to work together, to nail it. ”

On mandatory performance standards, Toohill says: “I think we’d expect that there’s going to be some mandated requirements to come through. I don’t think that’s going to surprise anyone. I think we’ve had the larger property groups and the larger owners doing a lot of voluntary work over the last four to five years, and they’ve gone a long, long way.”

But for the smaller players, she say, “it’s really hard to lift the bar…and I hear the feedback that when you go out into the suburbs and you look at the small commercial buildings [which are not performing] … it’s very hard … on those guys, so I do think you have to look at the regulatory side there.”

For bigger players like Stockland, it’s all part of the agenda.

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