By Tina Perinotto

Exclusive: 23 October 2010 – After an intense lobbying campaign Victorian property owners have won important concessions on how NABERS Energy rates their office buildings, bringing them in line with a national benchmark just ahead of the 1 November deadline for the introduction of mandatory disclosure.

At the lower end of the scale ratings in Victoria will jump by about one star.

At the same time The Fifth Estate has also learnt that NABERS plans to soon expand to a six star framework in order to reward high performing buildings.

The moves follow an extensive internal review of NABERS following persistent industry criticism. At the forefront of agitation has been the Property Council, which recently said it would conduct its own review the tool through an industry committee.

In recent days a letter sent to assessors by NABERS manager the NSW Department of Environment Climate Change and Water, obtained by TFE, shows the same benchmarking methodology that is applied nationally will now be used for Victorian buildings and adjusted to Version 8.0 of the NABERS rating calculator.

Jennifer Cunich, executive director of the Property Council of Australia Victorian Division said this was welcome news for the industry.

“Overall, this is a very good result for the property industry. It means that Victorian buildings will be rated on a level playing field with buildings in other states, and this is what the Property Council aimed to achieve,” Ms Cunich said.

DECCW manager built environment Matthew Clark confirmed to TFE on Friday that the changes would go ahead and said more were on the way as part of specific industry and broader pubic consultation.

On the cards would be higher rewards for high performing buildings.

“We will be looking in particular at buildings beyond five stars, when they start to exceed the five star standards so that they would be rating at 5.5 or 6 stars,” he said.

Mr Clark said there had already been a significant level of consultation with specific parts of the industry and there would be more public consultation.

There was no plan to “automatically make changes,” he said. “We would consult and test the water with industry people about what they think we should be doing.”

The move comes on the eve of the 1 November deadline for the introduction of the mandatory disclosure legislation, now known as Commercial Building Disclosure, which will require all offices of 2000 square metres or more to declare their NABERS Energy rating before sale or lease.

The NSW DECC letter said: “Whilst the technical review found that the fundamental philosophy behind the tool and methodology used to set the NABERS benchmarks has worked very well to drive real environmental improvements in the commercial building sector in Australia, it identified a variation in the approach taken to establish the Victorian benchmark.

“The NABERS National Steering Committee endorsed that the benchmarks for Victoria be reviewed so that the same benchmarking methodology is applied nationally. This is particularly important given the introduction of the Commercial Building Disclosure (CBD) scheme.

“Sustainability Victoria has approved changes to the Victorian benchmarks following consultation with the Property Council of Australia, who have also given their written support to refine and upgrade the Victorian rating scale.

“NABERS benchmarks for Victoria have now been adjusted to Version 8.0 of the NABERS rating calculator.”

The letter concluded that the change would only impact on the lower star ratings where the average star rating would increase by one star.

“There will be no impact on ratings achieving 4.5 or 5 stars as benchmarking at this level was and still is, set at a consistent point for all states.”

Disquiet

An industry source involved in the current round of negotiations told TFE that there had been significant private concerns from owners of Victorian office buildings about the tougher standards for their buildings.

Major property owners with good sustainability profiles had chosen not to have some of their Victorian portfolio officially rated and displayed on the NABERS website (which happens automatically) because of the poor results compared with other states, he said.

The emergence of mandatory disclosure suddenly made the issue critical because of the economic impact, the source said.

“We’ve lobbied really hard. The penalty was between half and one star particularly at the lower bands,” he said.

“Not that NABERS is a bad system; it’s a great system – world class – and no-one has anything better.”

However, there were problems.

“NABERS was not doing the low-end buildings justice in Melbourne. There is a long, long history about how it was set up and people have been thinking for ages about how to deal with that.”

In general the discrepancy was a hangover from the original NABERS methodology developed 15 years ago, which was based on the more inefficient buildings that typified the market at the time, he said.

“The buildings then were much more inefficient; they were quite different – so they needed to review the ratings bands [which apply for each star level] anyway and be open. They talk about building owners needing to disclose. They whole thing needs to be transparent.”

He said NABERS Energy was a misnomer; it was really a carbon rating tool because it converted the type of energy used to carbon emissions produced.

For instance carbon emissions in Tasmania are low because of the energy is primarily sourced from clean hydro-electric schemes, and in the Northern Territory they are low because most energy comes from gas.

Victoria was disadvantaged because of its reliance on brown coal. Adjustments had been made to allow for energy type and also for variations in climate, but not for the performance bands at each star level.

But at last Victorian property owners could “finally celebrate”.