20  March 2012 – Case study: Local Government Super claims its 20 year old commercial building in Sydney which has been awarded a 5.5 star NABERS rating without including its use of green power, is now the lowest energy intensity office building in any Australian CBD.

Since its 2010 upgrade the building’s energy use has fallen by 54 per cent and water consumption by 46 per cent.

The 10-storey building, Carnegie Morgan Hill House at 120 Sussex Street was upgraded in 2010. The project targeted waste, energy, water efficiency and improvement in indoor environment quality, or IEQ.

The improvements had the constraint that all work had to be conducted without disturbance to the occupants to ensure no loss of income during the project.  The energy upgrade was assisted with funding from the AusIndustry Green Building Fund.

At the time of the upgrade LGS also conducted a study at four of its buildings including Sussex Street to measure the link between base building sustainability, the IEQ and the financial benefit of the improvements to tenants. 

Independent consultant CETEC was commissioned to measure the indoor environmental quality before and after the upgrade, and found that:

  • Average tenant satisfaction rose from 66 to 82 per cent after the base building upgrade
  • The improved IEQ, including better air quality, thermal comfort and lighting, gave tenants an average financial benefit of $188 per square metre

Project’s aim
The project’s aim was to change marketplace perception and demonstrate that the challenges of resource consumption and climate change in the commercial property sector could be met cost effectively.

This case study demonstrates that with new technology, existing buildings can match or outperform new buildings and challenges the concept of what is achievable in existing commercial stock.

Project description
Carnegie Morgan Hill House is a 6700 square metre office building constructed in 1999. It comprises one level of basement parking, ground floor offices, foyer/lift lobby, café and nine upper levels of office accommodation.

In 2008/09 the property had a better than market average of 3.5 stars NABERS base building energy rating and a 2.5 star NABERS water rating.  Additionally it had a 1.5 star NABERS whole of building IEQ rating.

A sustainability assessment of the facility found that the “low hanging fruit” of energy and water efficiency work had been completed, a new building management system was being commissioned and a waste management program needed to be implemented.

Independent valuation in 2011 assessed that the sustainability improvements provided an $800,000 improvement in the capital value of the property.

Outgoings have been reduced equivalent to $17per square metre in annual costs.

The productivity improvement through improved IEQ was evaluated independently across four LGS buildings undertaking similar works.  Based on the NABERS IEQ improvement and University of California occupant surveys, an improvement directly to the tenant of $188 per sq m was estimated.

The project team recommended a combination of innovative Australian technology that would provide the best sustainability outcomes for the building, addressing energy use, water consumption and indoor environment quality.

The resultant building is more efficient and has more productive workspace which benefits both owner and occupants.

Works undertaken

  • A dedicated outdoor air-handling system.
  • A conversion of the existing floor by floor water cooled package system to a centralised chilled water system.
  • Reduction of the internal heat load and improvement of IEQ through lighting upgrades.
  • Review of waste management practices and cleaning and waste removal contracts and l Improving water management and water metering throughout
  • The building including dual flush toilets, flow restrictors and electronic controllers.

These works were undertaken in a fully occupied building, with no disruption to the tenants.

The project delivered:

  • 54 per cent reduction in energy use
  • 46 per cent reduction in water use
  • 95 per cent of waste material diverted from landfill
  • 35 per cent reduction in summer peak load
  • The retrofit works were delivered at a cost of $160 square metre, well under a property industry standard of approximately $765 sq m. The AusIndustry Green Building Fund grant made the final cost to LGS only $80 sq m.

The impact to occupants was measured with pre and post development productivity studies and resulted in an improved working environment estimated at $188 psm in increased occupant productivity.

The project delivered a return on net investment to Local Government Super members of 82 per cent internal rate of return with no reduced cash flow during the upgrade.

The initial review and concept began in January 2009 and the project was completed in mid-2010 at a cost of about  $1.1 million, with $500, 000 of this funded through the AusIndustry Green Building Fund.

The total project cost was under 20 per cent of the industry published estimated costs for energy upgrades for this type of commercial office building.

The technologies are now the standard building technologies for Local Government Super.

Although the project review did not seek to specifically use Australian technologies, these were found to be the best applicable technologies available for the upgrade.

Engineering consultant, Peter Phillips of MPES Consulting (previously PCES) worked with Roger Walker of Walker EcoStrategies (previously Napier & Blakeley) and Geoff Hilbourne, senior engineer, CBRE, in the review assessment. Other key consultants included property, building and project manager, CBRE.

Technologies implemented

e1 lighting
The existing base building (all floors) and tenancy lighting systems (for floors not previously converted to T5) have been replaced with the e1 lighting system. This lowers general lighting energy consumption to approximately 5 watts sq m and provides quality lighting in the working environment which does not have to be complemented with task lighting.

Energy improvements from the lighting refurbishment provide an energy efficiency improvement in the heating ventilating and airconditioning system by reducing the building’s heat load.

To realise this energy efficiency potential, building control systems have had  recalibration of set points and operating algorithms. This lighting upgrade has a direct energy reduction of 66 per cent for the tenancy lighting.

This initiative also provides an energy improvement associated with the HVAC system.

e1 lighting is Australian designed and manufactured, with manufacture in south west Sydney. The company is also 100 per cent Australian owned.

This lighting has demonstrated leading world best practice in energy efficiency and quality with demonstration for over six years of implementation in offices, factories and other properties, including the Sydney Opera  House.

It is cost competitive with imported lighting in retrofitting existing lighting systems.

PowerPax chillers

Moving from the previous floor by floor system to centralised chillers on the roof meant a new piping system had to be installed through the building.

Whilst this added significant cost to the project the total cost still remained under 20 per cent of published industry expected costs for the energy efficiency gains.

The chiller is a Melbourne manufactured PowerPax chiller, utilising a Turbocor oil free, magnetic bearing compressor.

Shaw method of airconditioning
Outdoor air was induced into the existing internal zone air handling units. This system has been converted to the Shaw method of airconditioning with the addition of a dedicated outdoor air handling system and a new control strategy for the  improved  management  of  conditions within the building.

The Shaw method of airconditioning was designed by the late Dr Shaw of Adelaide University. SMAC Technologies is a 100 per cent Australian owned business. The controls design has the added benefit of moving forward from existing temperature controlled comfort, managing occupant comfort through a combination of humidity and temperature control, and providing a more productive working environment. This technology has been termed “the silver bullet” for HVAC upgrades in existing buildings.

LGS chief executive officer, Peter Lambert, said: “In order to get consistently good returns for LGS members, we must keep tenants happy and our buildings full. It is important to note this upgrade was to base building aspects of the site only, however, the resulting increase in tenant satisfaction was strong. We were pleased with the scale of the improvement to the building’s productivity.”

LGS tenants backed up the LGS/CETEC study. Chief finance officer of recruitment agency, Xpand Group, Alon Bernstein said: “There has been a noticeable improvement in our working environment and this, in turn, has meant better employee satisfaction.”

Financial director at Informa Australia, Chris Probert said: “The lighting upgrade has contributed to our staff’s comfort and productivity, it’s good to know we are running on 100 per cent accredited Green Power.”

LGS now plans to widen the CETEC study to regularly measure the indoor environment quality of other buildings in its property portfolio.

The sustainability development project has been entered in the Property Council of Australia’s Innovation  and  Excellence Awards.

For more on the Sussex Street upgrade https://www.lgsuper.com.au/sussexst/

For more on LGS’s sustainable practices and investments


About Local Government Super

LGS manages almost $6 billion in superannuation assets for around 100,000 members, including 60,000 employees working for local government or related employers throughout NSW and 40,000 former local government employees. It has approximately $3.1 billion invested in responsible investment strategies across Australian shares, international shares, property, and the absolute return and private equity asset classes.

LGS is a signatory to the United Nations Principles of Responsible Investment and a member of the Investor Group on Climate Change, Australian Council of Superannuation Investors, the Responsible Investment Association of Australasia and the Global Real Estate Sustainability Benchmark. LGS is also a shareholder in Australian ESG research and engagement firm Regnan.

Compiled from information supplied by Local Government Super.