By Tina Perinotto
If the property industry had any doubt that its world was about to be irrevocably changed, then those doubts were dispelled at ‘The Carbon Obligation – Everything you need to know if you buy, sell, lease, develop or manage property’ seminar, hosted by the Property Council of Australia in Sydney last Thursday.
In a sweeping wrap up of the events massing on the horizon, the seminar’s panel line up did a thorough demolition job on any lingering hopes that the property industry might soon wake up as if from a bad dream and everything would get back to normal.
On the panel were Romilly Madew of the Green Building Council, Rowan Griffin of Colonial First State Global Asset Management, Felicity Rourke of Deacons, Kevin George of Jones Lang LaSalle and Garielle Kuipper of Investa.
Opening the proceedings was the Environment Minister Peter Garrett and facilitator was the PCA’s chief executive officer, Peter Verwer.
Setting the scene for the new business environment was lawyer Felicity Rourke who warned that many people in the industry had no idea how difficult it would be to comply with mandatory disclosure.
Even accessing information – from tenants or sub contractors on site – would be a “fiendishly complex task,” she said.
A buyer could refuse to hand over the balance of purchase price if the carbon disclosure was incomplete, and getting relevant information out of tenants would be a whole new ball game.
“I would wager there are many leases in place that contain no provision to get the information from tenants,” she said.
The National Greenhouse Energy Reporting scheme could affect bigger energy users.
“If you have a large enough property portfolio you may trigger corporate aggregation responsibilities,” Ms Rourke said.
Property Council chief executive, Peter Verwer, added that the thresholds would soon change in any case: “If you are not covered by NGERs [the National Greenhouse Energy Reporting scheme] you soon will be as it gets ramped up.”
According to Gabrielle Kuipers, “mandatory disclosure is the instrument that has the potential for market transformation.”
Romilly Madew said the National Framework was the thing to watch. COAG ( the Coalition of Australian Governments) was agreeing on a strategy for everything, it seems, and it was doing so for the next 10 years.
Madew urged everyone in the room to read the document. It was short: “You can read it on a trip to Canberra. It covered anything that will affect your building or your portfolio. Initiatives and policies are going to be rolling out very very quickly.”
According to Peter Verwer re-configuring the existing energy grid to accept green power into its old brown energy systems would be “the biggest transformation that can be achieved…turning buildings into power stations within the space of a decade.”
But it would be as “difficult as floating the dollar and [as difficult as] competition policy”.
But the government wasn’t sitting back, said Mr Verwer.
Although much of it is un-promoted and even un-collated, the Property Council had worked assembled a list of dozens of property-related programs to help the property industry re-configure itself to face climate change.
Together these were worth $575 million and this didn’t include the $100 million the Minister had just canvassed for a new smart energy grid, Mr Verwer said.
He urged the industry to get its share. “There is a river of money out there – taxpayer money…the property industry paid $34 billion in tax last year – let’s get some back.”
And if you want to know how, and get some advice on how to green your property portfolio, the Property Council’s new website, the relaunched Your Building, [www.yourbuilding.com.au] had a treasure trove of information and guides, he said.
Investa’s Gabrielle Kuiper brought the reality of climate change home with a thud:
“The latest science is telling us that if it’s business as usual temperatures will rise by 5.2 degrees on average by 2100 and there is a one in four chance of exceeding 6 degrees. We don’t know what five or six degrees will look like but we are pretty sure it will mean sea level rises in the order of metres rather than centimetres…you’re talking about the end of agriculture in the Murray Darling and the world’s delta’s, areas like the Ganges becoming uninhabitable, and the end of the northern beaches in Sydney to bring it really local and close to home.
And it would hurt the bottom line. In the Sunshine Coast she said, properties bought for millions of dollars had now been risk assessed for climate change: they were now considered to be future swamps because of sea level rises.
And the take home messages?
From Peter Verwer summing up of the seminar:
- Mandatory disclosure relates to the sale of buildings but also to leasing space of more than 2000 square metres
- A new metric will be devised to measure a tenant’s performance, possibly related to lighting in the first instance.
- Get your NABERS energy rating now
- The requirements have started with energy but inevitably they will move to other NABERS performance categories, so it’s worth getting to know them a bit more.
- After the “multiple stuff ups” that accompanied the GST, make sure new leases give you al the power you need to get information from tenants
- Check and all major existing leases
- Get familiar with NGERs, It’s mind boggling but there’s help, “with the Your Building website”
- A tip for leasing: in a world where you are paying more for incentives, allocate some to provide more energy efficiencies. “Let’s make the incentives do the work in performance for energy… low VOC paints and so on.”
- “There’s a river of money out there; get your hands on some of it.” The government programs adds up to $575 million without the smart grid of $100 million.
- Don’t buy land that is going to be a swamp. “Wetlands being swamps with street furniture”
- Have a strategy and a plan and then bring it forward
The Fifth Estate
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