13 March 2013 — Green office buildings continue to outperform the total office property sector, according to figures released by the Property Council and IPD Australia.
The IPD Australian Green Property Index showed an annual total return of 10.6 per cent for Green Star rated, and 9.9 per cent for NABERS rated, office assets for 2012.
The total office property sector, comprised of rated and non-rated assets, reported an annual return of 9.7 per cent.
IPD Australia and New Zealand managing director Anthony De Francesco said the latest investment return results “clearly show that green buildings deliver an enhanced investment proposition both in terms of investment return and a firmer cap rate”.
“The enhanced performance of Green buildings is due to a higher capital return component, consistent with generally more favourable space market metrics,” he said.
For the annual total return performance for Green Star rated property assets, returns to December 2012 for 4 star, 5 star and 6 star rated office buildings stood at 10.7 per cent, 10.7 per cent and 10.2 per cent respectively.
Over the last two years to December 2012, A-grade office buildings with a Green Star rating delivered an annual return of 11.2 per cent against a 10.1 per cent return for all A-grade office buildings.
In addition, IPD reported a 10 basis points discount on cap rates between Green Star A-grade buildings and all A-grade buildings.
DEXUS Property Group sustainability general manager Michael Lane said over the past three years, the company had invested more than $30 million in energy efficiency improvements across its listed office portfolio, achieving an average 4.7 star NABERS Energy rating, exceeding its 4.5 star target.