We all know there is significant value in green building. Research in Australia and internationally has proven it time and time again. And the trend is that green building, particularly in the commercial space, is increasing. Why? Because green buildings offer many benefits ranging from increased market value and reduced vacancy rates through to staff productivity benefits and lower occupancy costs. It’s become a no brainer for many developers and investors.
Yet we regularly see highly efficient buildings with good sustainability features not being recognised and marketed to their full potential. Is it because most commercial property listings provide minimal information? Why do they typically not include features that highlight how efficient the building or space is? Even worse, why don’t the majority of buildings with high NABERS or Green Star ratings have their rating logo online with the sale and lease information? A disappointing omission, especially for developers and owners who make a significant effort to obtain these ratings.
Just like the motor vehicle industry that over the past 30 years has transitioned from large, fuel guzzling, pollution contributing vehicles to smaller, more efficient, eco-friendly transport, the built environment is also changing. Over the past 15 years or so, buildings are no longer just “places to be” with high utility bills to pay and a larger than necessary environmental footprint. Buildings are now expected to perform well, be healthy places to occupy and even contribute to displaying corporate social responsibility through “walking the talk” on sustainability.
Most of the larger construction firms (such as Lend Lease, Charter Hall and Mirvac) are now building highly efficient buildings and having them Green Star rated. This wouldn’t happen if they felt it wasn’t worth the effort and cost. Likewise many organisations, including government offices, support this development and now prefer and specify highly efficient spaces to occupy. So the buildings are being built, and demand is increasing, but these buildings are not easily recognisable, and any sustainability features and their benefits are not well promoted.
Our team at the recently formed Green Building Institute (a non-profit training provider for the green building and property industry) think that it’s because the education process for real estate property professionals has not kept pace with developments in sustainable environmental options. Inadequate search facilities on property listing websites are also a factor.
So let’s look the knowledge gap first. Apart from the Royal Institution of Chartered Surveyors, which has updated its training materials to include sustainability features during property valuations, there has been little education available for real estate professionals to assist them to identify, understand the benefits involved, and better market such buildings.
Additionally, real estate professionals are generally very busy and time is a premium. The right knowledge and education would mean real estate professionals could offer more value for their clients, demonstrate that they understand market trends and will be able to promote green buildings to their best advantage. It would also enable agents to provide more useful information on property listings that will assist those looking for efficient properties. All of which is important for gaining the confidence of clients and closing deals.
Agents need to know that promoting green buildings to their full potential is the key to engaging the educated client. It is now in the real estate industry’s best interest to understand, identify and promote sustainability features. Many landlords and tenants look for it, and increasingly, so do investors. Where do they look? Generally property listing websites.
Website listing information is a great place to start
With demand changing to include sustainability features, websites should look to present suitable areas to facilitate this. But is it really needed? Yes, I think so. Six years ago there was just one green property listing website, now there are at least six that we know of in Australia. With rising energy costs, more focus on sustainability in buildings and mandatory disclosure in the commercial real estate market, you’d expect more information to be presented on a listing than is currently available.
From a commercial perspective, and despite the Commercial Building Disclosure program, the only mainstream property listing that includes any of this is the REA Group’s realcommercial.com.au website, where the NABERS rating can be included on a commercial listing (under Energy Efficiency search bar). In the residential sector, Domain has recently included LJ Hooker’s Liveability program. Apart from the specialist “green property listing” websites – these two groups provide the only mention of energy efficiency or sustainability in key property listing sites. This needs to change.
Wouldn’t it be useful if building owners could easily find an agent that understands sustainability and will promote it, or if investors and tenants could easily find an efficient property with a basic search facility? So yes, this is a call to the real estate property listing sites to include Green Star and NABERS ratings into their commercial property listings.
Buildings are transforming into high performance structures, and the demand is there. It makes sense to make it simple for clients to “strut their green credentials” and for others to find what they are looking for. We have fuel economy figures on our vehicles, energy and water ratings on appliances. Now it needs to be on our buildings (all of them ideally) so that better informed decisions can be made.
It’s not just Australia that recognises this is an issue that needs resolving. In recent weeks the Green Building Council of Australia and the Building Research Establishment, which produces the BREEAM green building certification in the UK, have announced partnerships with the Global Real Estate Sustainability Benchmark to promote sustainability in commercial real estate.
So it’s interesting times for the built environment, construction companies and the real estate industry. With the help of a bit of sustainability upskilling and some minor modification of real estate listing websites, things can change for the better. Some are ahead of the game, and some behind, but the future is reasonably clear (or green) – all those associated with it need to evolve, or dissolve.
Danielle King manages the Sustainability in Commercial Real Estate course developed by the recently launched Green Building Institute, and is also director of sustainability consultancy Green Moves.