The Better Buildings Partnership in Sydney finished the year on a high note. With membership comprising most of the city’s largest landlords, supported by the City of Sydney, the BBP is staging a quiet revolution in green leases.
Here’s how the numbers look: In 2007 just 10 per cent of leases were estimated to be green, BBP’s inaugural Better Buildings Partnership Leasing Index shows. Today the number is 62 per cent across all leases in the Sydney CBD and whopping 80 per cent of prime buildings. That’s nearly 600 of around 725 leases signed in prime buildings in 2013-14.
Instead of two or so green lease clauses available in years gone by, today there’s a range of 12-13 to play with and an average of 10 used.
“What we have seen in the past 10 years has been a broad market transformation towards better leasing outcomes, and this is quickening in pace,” the BBP’s Ben Thomas said. “Best practice leasing is clearly becoming the new normal.”
The movement stemmed from the realisation that despite great strides by owners of top tier buildings in sustainability – energy in particular – tenants have been largely untouched by the transformation. Virgin territory.
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Top performers by sector are IT companies, but not across the board, and financial services, especially banks.
Among the IT sector the stars are the big global players whose identity remains undisclosed but is not hard to guess – those who can claim Silicon Valley as their birthplace, a predominance of young stakeholders, policies that espouse good environmental social and governance practices and have high ambitions to aspire to. But some telecommunications companies are also performing well.
These companies are “open to collaborating and translating their leading CSR policies into effective frameworks for working with their landlords”, Mr Thomas said.
The pioneers in green leases are governments, both at the federal level –under John Howard’s government – and the state, along with early industry leaders such as Investa.
In NSW the Baird government has reiterated commitment to efficiency in energy and other resources as well under the Government Resource Efficiency Policy announced mid-year.
But despite the good performance at the top end the majority of leases overall remain unreconstituted.
“BBP is in this game because while base buildings have consistently improved to a market sweet spot of four star NABERS and above, more than three quarters of tenancy areas still operate at below ‘excellent’ nominal lighting power density ratings and over two-thirds of tenancies still have basic lighting controls,” Mr Thomas said.
The big challenge now and the prospect of the biggest benefits, Mr Thomas said, is to improve tenant lighting.
A downside to progress that might be counterintuitive is that some of the bigger leases are signed even today without green leases attached. The reason is that key operational staff in larger tenancies tend to have strong industry network relationships and can sign off on a deal without bringing in the sustainability advisor.