It’s war out there

8 July 2011 – So who’s going to Canberra for the lock up on a carbon price?

Not The Fifth Estate. But not sadly. There will be enough excitement and madness to feed a frenzy of adrenaline rush everywhere you turn after Sunday afternoon.

It’s been a rough few months. It’s felt like the world has done nothing but slide backwards. But to advance in the tango as they say, you need to know how to backstep, and do it with style.

Another great saying apt for the times: the past is harder to imagine than the future. (Who was that?) That’s because you can’t “unknow” what you know.  In one year’s time it will be hard to imagine where the Australian psyche was right now when so many people are shrieking that the economy and life as we know it will collapse. Just think they fought the abolition of slavery on the same grounds.

It’s almost embarrassing to look back just two years and see how tentative the entire climate change/sustainability debate was. Not now. It’s hard to find anyone controlling a decent size portfolio in the property market who doesn’t “get it”.

In this issue – a  special pre-changing-of-the-world-as we-know-it issue, Leon Gettler tried.

In a huge canvass of the capital markets – AMP Captial, VicSuper, Local Government Super, UBS, Forza Capital – Gettler found a tiny bit of scepticism about the value of green, but it was qualitative instead of quantitative.

Our posting on the IPD Green Building Investment Index has been top trending since we posted it. Well, why not?

It’s shown conclusively that there’s money in green buildings, 340 basis points more than non green, in fact.

But so what, say people such as UBS’s John Freedman. For most capital expenditure, you don’t’ expect to see a direct return, he says.

“Similar to a lot of other capex [capital expenditure] in the office market, you may not get any return on it. It’s a cost of staying in the game,” says Freedman.

“If you don’t do it, your ability to attract the better quality tenants may be weaker, or  you may face a smaller pool of tenants because some of them won’t move into your building unless a certain level has been reached.”

Hooray! Someone finally nailed it. How come so many sceptics (masquerading under the cover of protecting their investors’ funds) have no problem justifying a major retrofit of a tired old sack of a building. But if it’s a green retrofit, suddenly it’s got to pay its way dollar for dollar.

Pleeeeze…

It’s about risk and it’s always been about risk.

If you let yourself go, you will cease to be attractive. It’s the law of physics.

Blowing poisonous smoke into the atmosphere is likewise not attractive.

Now it’s going to cost more.  Just like cigarettes cost more and more and more.

See you next week, when we wake up to a world ready to fight for its future.

editorial@thefifthestate.com.au