On sentiment, follow the leader (not) …and a birthday note from TFE
11 May 2012 –It’s tough but we’re really busy.
We’ve heard that comment about Sydney, oh maybe 10 times now…
BIS Shrapnel’s Frank Gelber, speaking at the Property Funds Association conference on the Gold Coast last week nailed this curious and amusing attitude of Sydneysiders: ” Sydney investors know Sydney will never recover ever again…”
(And when there is a boom, the feeling is that this will never end either.)
We’ve given a lot of space this issue to the markets, the macro outlook for the economy and the financial because right now it’s cited as a key barrier to the takeup of sustainability retrofits especially in the B, C and D grade property level, typically owned by the unlisted funds and private investors represented by the PFA.
But as you scroll through the views of the speakers and some of the delegates at the conference you can see it’s not all bad news.
Gelber said, Queensland is sitting on the start of an “almighty boom” with a huge amount of investment already in place for the next five years.
Researcher Tony Crabb said Australia was poised for a great medium and long term future, if for no other reason than our proximity to China and the Chinese love of property investment.
Local Carbon Australia’s Meg McDonald outlined some of the funding options available to assist in retrofits.
But the poor sentiment is not the only reason for reluctance to embark on a cleaner energy future.
Some of the engineers, consultants, finance and leasing consultants can prove saving and payback in next to no time.
In a chat with Arup engineer Eric Serret this week, he said a profile he had recently completed for a 30,000 square metre building showed there could be a 15-20 per cent return on investment through energy savings. Still the client said no.
What’s going on?
It’s not just the economy. More relevant is probably the risk averse, worried and overworked executives who have to embrace what’s seen as a risky venture that don’t’ know much about and will take up a lot of time they really don’t have.
As one wit said, there’s a saying: you never get sacked for not making a decision. It’s the decision making and action that’s risky.
Budget black holes
After Tuesday night’s budget, big chunks of the sustainable property industry went into a funk. The federal government has been seriously engaging with the property industry for a few years now, listening and taking action on planning, cities, infrastructure and green buildings.
Now there’s an about face on the Tax Breaks for Green Buildings program, which had been touted as a $1 billion program.
Touted is the right word… it turned out to have been a faulty program with faulty design and worse faulty intention.
At least The Greens are maintaining their loyalty to the sustainable property industry. Leader Christine Milne who seems to be closest of all green groups (and other politicians) to understanding the economics and drivers of this industry, has promised to keep needling the government on the tax breaks issues.
Some people though had a more restrained view and said tax breaks are complex and hardly worth the trouble at the best of times.
The Property Council’s Peter Verwer told The Fifth Estate that the latest proposal from the industry roundtable working on a new design for the program was to convert it to a straight grant, payable on verification of energy savings.
This pushes costs out significantly, which makes the axing all the more curious.
What seems to have happened is that the Tax Breaks have fallen victim not to the reality of their cost but to sentiment. The need to look tough on business.
At least the feds did not mess with or delay the carbon price as some feared.
And for what its worth the Clean Energy Futures package of $10 billion could pick up the slack with $5 billion supposedly allocated to energy efficiency.
Regardless the more level headed people say the business drivers of efficiency and competitiveness will continue and globally the momentum for big business to clean up its act is picking up where government are failing.
It’s just past three years since The Fifth Estate launched, and this, our 100th issue seems a good time to mark the occasion and say a huge thanks to our supporters – readers, sponsors and casual advertisers alike.
Your part in this is what TFE is all about.
What keeps us going is the amazing feedback we get. From the top corporate levels to the sole operators struggling to keep afloat in uncertain times and stay committed to an industry that they are passionate about.
This industry deserves to flourish and excel and it knows it.
We want to do our part and in efforts to deepen reader experience we have embarked on a short series of ebooks. [Thank you Steve Jobs and all technology nerds who have made this possible].
The first – a data base of the top university courses in sustainability related to the built environment – is already on our front page and trending right at the top of our monthly hits widget (front page, bottom right).
Next will be an ebook on Environmental Upgrade Agreements. We’ve already held two roundtables with industry leaders in this wonderful new form of retrofit finance.
Siemens, NAB, Napier & Blakeley and Cundall have come aboard as sponsors, Siemens as lead sponsor.
This commitment – and that of many others – ought to demonstrate that this Australian version of retrofit finance looks like a winner, with lasting power.
Next ebook off the virtual presses will be a special project report of GPT’s new head offices in the MLC building in Sydney, covering in detail how an office in a 33 year old building could be made six star Green Star..
In addition to these ventures we’ve also this week held our first “salon” dinner with visiting green building guru and author Jerry Yudelson – here for the big ARBS event in Melbourne earlier this week – along with a handful of industry leaders interested to hear his challenging thoughts. The event was kindly sponsored by Investa.
On the social networking side, we’ve modestly embraced Twitter and used it to source stories and sentiment of major events. A great resource. There’s Facebook too, which we’ve made a small start on.
Spinifex, our column for the industry by the industry is thriving, And yes, it often gets spikey. Especially with regular columnist Michael Mobbs whose agenda is to push the boundaries of sustainability, pure and simple. Great work Mike, and a huge thanks.
A massive thanks too to Lynne Blundell who continues to pour out great indepth pieces on sustainable property and is currently writing our EUA ebook.
And sincere thanks too to Lyn Drummond who leaves us soon for a move to Europe after 18 months.
Yes, we’re looking for a bright spark to take her place.