By Tina Perinotto
Greg Paramor might well be known as one of property’s original Midas men. He has founded a string of successful property companies – Growth Equities Mutual, Paladin and James Fielding and headed the giant Mirvac for four years until 2008.
Better still, he seems to possess the most enviable attribute in the business: gut feel, that unerring sense of when to buy and when to bail. At Mirvac for instance, he left when the company delivered a $171 million profit. A year later it posted a $1 billion loss.
Yet these days, as he settles into establishing his brand new venture, Equity Real Estate Partners – which includes Adrian Harrington, who worked with him at Mirvac and James Fielding, and Jonathan Sweeney, formerly of The Trust Company – Paramor is as comfortable discussing sustainability strategies as he is investment strategies.
Paramor first showed his green leanings a few years ago when he tipped in with a bunch of friends to buy a retreat in Tasmania’s pristine wilderness, a place he gets to at least six times a year to fish and enjoy something untouched by the urban fabric he deals with in his daily work.
Right now he is part way through building a new home at Palm Beach that will have no air-conditioning, be off the energy grid and self-sufficient in water.
“We’re putting in solar and water and cross-ventilation without going overboard but we will be able to go off the [power] grid and be able to self sustain with water.
“I will be long gone before I see a payback, but the simple fact is I can, so I will.”
“I think that more and more as energy costs go up the payback period will come down, and if you like it’s putting your money where your mouth is.”
At Mirvac, Paramor was one of the first to insist that a new shopping centre the company was building, the Orion at Springfield in south-east Queensland, aimed for the maximum green stars (6 Star Green Star Qld under the Green Building Council of Australia rating).
But don’t be lulled into a sense that Paramor is a climate change believer. Not necessarily. In his view this is irrelevant anyway.
What really motivates Paramor is logic. For commercial property (as distinct from residential) sustainability is “self evident.” It makes sense – and it makes money.
“You don’t embrace this at your peril,” he says.
“I don’t care if you are a sceptic on global warming or [a] climate sceptic; efficient buildings make a lot of sense, so let’s ignore the climate change debate for a minute and ask does this make good sense. If you have a building and you can lower your energy usage and lower your costs by 20 per cent, 30 per cent maybe, more than the building next door then you have a competitive edge.”
On climate change he says: “I say the debate is for another day. I don’t know. When I leave this earth the water might have risen to the front yard, or it might not.
“There is a lot of science that is it is going to do that, and every other day you pick up a paper and it says it’s not going to do that.
“So my thing is economic; it’s that the built environment uses an awful lot of energy.
“It carts rock from one side of the world to the other to put on the facade of a building when a local rock would do.
“It’s learning now about energy efficiency and how you treat inside, about glazing and what you do with cross-ventilation.
“To my mind it’s just dollars and the efficiency of those dollars.”
His former company, Mirvac, was one of Australia’s pioneers in sustainable housing on a large scale, although well before Paramor’s time.
“Mirvac had done a lot but didn’t speak about it because they didn’t think it was appropriate to speak about it,” Paramor says.
“If you think about it, Newington, which was the [location of] the Green Games, was the first suburb in Australia to embrace technology like solar and recycled water and proper orientation for sunlight – yet it was never heralded. The attitude I found was, ‘Oh yeah but it doesn’t sell’, and my attitude was, ‘That might have been yesterday but it’s not tomorrow’.
“My long-standing thing is that you will go up to a house and see a star rating that you see on a fridge or a washing machine and you know if you have that rating you have certain efficiencies coming through.
“And that’s sort of happening via NABERS and those sorts of certain rating tools starting to be used. But it does take time for the psychology of the public to change.”
This is something that could happen very fast, Paramor says, especially when “oil goes screaming up to $100 a barrel and electricity goes up for all sorts of reasons and you’re doing it tough on your pocket, then you start to think, ‘is this sustainable?’
“In housing it should equal lower-cost housing.
“So I come down to, hey, this is good economics to use sustainability in sensible and better ways. It should equal lower-cost housing not higher costs. It should equal better environments to work in as people think ‘Maybe I don’t need air-conditioning’.”
But while in commercial property going green means saving money, the payoff lags in housing. Paramor says that in part this is because we haven’t learned to use materials properly – and because we have not learned about how to appropriately plan for particular sites.
PLANNING AND TRANSPORT
Another big problem in housing, he says, is that affordability is influenced both directly through the cost of housing and indirectly through planning, from the cost of urban sprawl that unsupported by transport infrastructure in particular. This in turn impacts on sustainability.
Planning, especially in Sydney, is “appalling” Paramor says. “Nothing is integrated. The result is hundreds of houses built and no connections made to trains or other transport.
“I think it’s appalling and so I get so angry about these people we’ve allowed to be in power who have no right to be in power [because] they are so incompetent.
“Sydney has to keep growing because Sydney is a very productive place to be.
“The Bob Carr solution is to put a barbed-wired fence around it and that’s ridiculous.
“The first way out of the mire would be to have an integrated transport solution. One authority that integrates everything. Next is you say you need efficient transportation between major employment zones and community areas.”
Paramor points to suburban housing where people need several cars in the family and incur high petrol and toll-road costs. [One family highlighted in the Sydney Morning Herald early this year said it spent $60,000 a year on the three cars it needed to maintain.]
Housing in the outer suburbs looks cheap, but only without the additional costs factored in.
“For a lot of people it’s not a choice” to live in a two-bedroom apartment in the inner city if they have children, Paramor says. “ That’s not quality of life.”
He says Perth has a good transport system, “the best of all the states. You can jump on a train and it runs down the middle of the freeway.”
On a broader level, Paramor says the lack of leadership at the national level has not helped.
“The Federal Government has certainly been making a lot of noise, but [the sentiments] are yet to be seen in action. There’s certainly been a lot of noise about the carbon-trading scheme they are proposing, and eventually that catches up with householders and shopping centres or office buildings.”
Whatever happens with climate change, Paramor is hard to scare.
For instance, he lives in a waterfront property but is not worried about rising sea levels. “Why not? Because we are on a sloping site it’s not going to bother us.
“Am I worried? I don’t know whether it’s going to be extreme or not extreme. Nobody knows.”
The uncertainty, however, would not prevent him buying a home at Narrabeen, a low-lying Northern Beaches area already threatened by storm surges
“There are just as many studies that indicate there will be a rise in water as there are [saying there won’t be].
And he thinks that with a creative and inventive approach the challenges can be met, up to a point.
“Sea levels do rise over time and we know that and there are some ways of accommodating that like sea walls, that other countries have used. Holland is a classic example.”
The threats “would not stop me. It would make me think, I suppose, but it wouldn’t stop me”.
What we need on climate change, he says, is to “think out a way to overcome it”.
He also rejects suggestions that climate sceptics are mainly associated with the mining industry. There are those who are not, he says.
“Global warming and sea level is part of long-term cycle.” Besides the impact of fires that have “raged around the globe” have belched out vastly more pollution than humans.
“Humans may be exacerbating [the problem] and we probably are … and I can’t see how we cannot have change when we’re pumping so much rubbish in to the air.”
But in the end nature will prevail, Paramor says. “The population will match what the Earth can offer. We’re just another species.”
For now, Paramor will be doing his bit to minimise the impact of our species on the planet, regardless of the science.