This market is moving.
Don’t pay any heed to the latest sorry commercial vacancy figures; on-the-ground specialist property recruiters have never been so busy, right from the first week of January (unheard of), and they are even thinking of putting on staff to handle the deluge of commissions for new jobs. In firms like Jones Lang LaSalle, Anita Mitchell’s energy and sustainability services team is run off its feet and hiring seven new staff to almost double its national team of eight. “We’re hiring all over the place … loads of interviews … it’s keeping me very busy,” Mitchell said.
It’s as if the plug has been pulled on a stream of pent-up demand. But even last year, in the middle of the financial crisis, the team’s revenue rocketed up by a massive 155 per cent.
“In one of the worst years on record,” Mitchell quipped. “You can imagine what sort of a year we’re gearing up for this year. It’s all hands on deck. We’re busier than we’ve ever been.”
Adding to the demand for Jones Lang LaSalle is the huge Telstra facilities management contract that JLL has won from the United Group, with transition scheduled for 16 March. Other clients include GPT, Lend Lease, Dexus and other listed real-estate trusts.
What’s interesting is that although the financial crisis slowed the action in climate change for property, it did not slow the intention, Mitchell said.
“It’s like everything was put on a pause button. The issues were just as important but people didn’t have the money to do anything. But they didn’t talk about it any less.
“We pumped out a huge amount of proposals but nothing happened. It’s not that we lost them to anyone else, but … people didn’t press the ‘go’ button.
“Now people are saying, ‘You gave us this proposal and now we’ve go the funding to do it and we’ve got the impetus to do it’.”
The failure of the carbon pollution reduction scheme to pass the Senate last year is almost irrelevant, Mitchell said. “It was never a huge driver; there are so many other drivers, and electricity prices are rising anyway — 20 to 25 per cent [expected] this year.”
“NABERS energy performance improvements will be dominating the landscape in the next 12 months or so,” she predicted.
There will be two approaches, she said. One for companies that simply want to be compliant and another group that says, “We’ve got the rating, now what do we do with it?”
The Asia-Pacific region will also be in for a big sustainability boost in property, Mitchell said.
Colliers’ Simon Cox, who heads up the national sustainability team, likewise sees no sign of abatement in the drive towards sustainability — the reverse, in fact.
He predicts that demand for more sustainable property will escalate this year, regardless of what happens with the carbon pollution reduction scheme. “Even if there was no climate change, it’s all relevant,” he said.
“More sustainable property increases productivity, uses less stuff. The prospect of rising sea levels is one aspect but there is the imperative for change that has existed for a thousand years: don’t waste stuff.”
Among the major drivers will be mandatory disclosure, and for some companies it will come like a “sledgehammer”, he said. “People not caught up in the first wave are wondering, ‘What the hell am I supposed to do?’”
In the regular property world, too,recruiters were rubbing their hands in anticipation of an end to the gloom of the financial crisis. “I’ve never seen it so busy,” Cox said. “November was the busiest month I’ve ever had in seven-and–a-half years.
“We were doing recruitment deals right through November and December. Even the first week back in January, and that’s quite unheard of. We might need to take on more staff.
“You get the impression that clients are now able to flex their muscles and go through with ideas and projects.”
Carbon markets in doldrums
Sadly what’s true for property is not so true for the industries gearing up around carbon trading.
Gareth Johnston, who is general manager of the Australia & New Zealand Sustainability Circle, a network of about 300 major corporations, says that anything to do with climate change and adaptation is rocketing along. Sadly the opposite is true with the carbon industry.
News is filtering through of carbon-trading desks slashing staff; carbon newsletters paring back, and the financial markets yet again scared by the uncertainty in policies. Of course, all this affects property, too, in the longer run because energy is such a big component of buildings.
In defence of the Federal Government — for once.
What is it that makes people so angry that the attempt to achieve the most ambitious transformation of consumer sentiment in Australian history has not gone without a hitch?
Think about it: virtually free insulation for every home in Australia that wants it; a $10,000 interest-free loan for every home that wants to transform its sustainability profile. And before this, a refund for most of the cost of photovoltaic solar panels so you can ditch the power bill.
Regardless of the Federal Government’s failure in the many macro areas of climate policy, these programs have the potential to turn around thinking and comprehension at the grassroots level, which would support bigger macro policies later, you would think.
Even though these programs were only engineered as a part of a stimulus package, when the entire world was staring into the abyss of another Great Depression, they are still laudable initiatives.
It is a cheap shot for the Greens and their fellow complainers to be so viciously critical of the programs for their faulty administration, or because computers crashed, or because programs must end early because they achieved their target early.
What’s the main game here? We thought The Greens were there to help transform the Australian economy into a sustainable future.
From the Opposition, it’s to be expected that the Government is put through the wringer on anything that goes wrong, and a call for the resignation of Environment Minister Peter Garrett. That’s its job.
The deaths of four young men because of poor training to install insulation are a tragedy.
But until the insulation rebate program came into existence, were are led to understand there were no training standards at all. In any enterprise things go wrong, before they go right.
Perhaps the Government should have been more prescriptive. It chose market mechanisms to deliver the programs, right in line with Treasury thinking. It allowed the market to train the installers, choose the type of insulation used, and it allowed the market to decide how many green home-loan assessors to train and approve.
But if it had mandated all these things, you can bet it would have been hammered for that too. The mandates would have created bottlenecks, delays.
And that would never do in our “I want it and I want it now” economy.