Forza Capital says a refurbishment of a 7683 square metre commercial office building in Brisbane’s CBD will cut emissions by up to 55 per cent, with a target of a 5.5 National Australian Built Environment Rating System (NABERS) Star rating.
The 25-year-old building located at 200 Creek Street will showcase how existing buildings improving energy efficiency and energy conservation and switching to renewable energy can improve sustainability and cut emissions significantly.
The refurbishment is expected to lead to the direct abatement of 415 tonnes of CO2 annually and 7128 tonnes of CO2 over the lifetime of the building.
Built in the 1980s the building, purchased off market from another fund manager for $41 million equating to $5,336 a sq m, has 10 levels, including ground floor, with 88 car parks.
Australian government-owned Clean Energy Finance Corporation (CEFC) is providing a $30 million senior secured debt facility to finance energy performance improvements in the building.
Forza Capital director Adam Murchie said it is a “fantastic partnership working with CEFC transitioning these kinds of assets”.
According to the Green Building Council of Australia, the mid-tier commercial office building sector is lagging behind in energy retrofits. And a recent Buildings Performance Institute Europe (BPIE) policy roadmap found that the climate impact of new buildings is much too high. Refurbishing existing buildings is one of the most cost-effective ways of reducing carbon emissions and lowering energy use.
Mr Murchie said that the Brisbane building represented the perfect opportunity to upgrade a building that would otherwise be “approaching the end of functional life.” He says that the building was functionally at a 0 Stars energy NABERS prior to the refurbishment.
“It needed to be replaced in any event. For us, that’s the opportunity. If you need to make that spend, let’s make it super efficient while we’re at it. It’s almost akin to a blank canvas and gives you the ability to take a whole-building view and an integral approach.”
“Most buildings give you the ability to retrofit and upgrade. But this building had a large vacancy of tenants, so it’s easy to get in and renovate. It is at the end of economic life most building management systems need to be replaced. It’s an opportunity for a major efficiency upgrade.”
With that “major efficiency upgrade” comes the opportunity to “reduce obsolescence and bring it into the modern era”.
The building will get a total makeover internally. Forza is working with CIM Building Analytics, Blue IOT Smart Cities Platform, Integral and Building Services Engineers to undergo a pathway report, building maintenance services replacement, lighting replacement, tuning of the building, solar and battery array installation, and embedded network and microgrid.
It will be fitted out with complete end of trip facilities, bike storage, efficiency and mapping for ongoing monitoring and maintenance, and efficiency management.
Key work in the refurbishment and repositioning include:
- fit out of commercial office tenancies including partitioning, office furniture, services (HVAC, electrical, plumbing), amenities (toilets), flooring, painting
- lift upgrade including lift motors and controllers
- HVAC upgrade including new water cooled chiller and pipework as well as new chilled water fan coil units located at each level
- ESD works including roof mounted photovoltaic solar array together with associated battery storage, microgrid establishment and metering/distribution upgrade
- foyer upgrade including new fixtures and finishes, lighting and possible reorientation of foyer design
- end of trip facility installation including delivery of showers, lockers, change areas and associated toilet facilities
- general building upgrades including fire indicator panel works, exit signage upgrades, roof upgrade and soffit works
According to Mr Murchie, the landlord’s electricity for the period of 1 September 2020 to 31 August 2021 was 1325,137 kWh. Tenant consumption (confirmed by Watts Energy) from 1 September 12020 to August 31st 2021 was 413,181 kWh. Building common electricity consumption was 911,956 kWh
“It is a well-built building, totally detached, with fantastic natural light and centrally located making it very accessible. It sits uphill overlooking a CBD. Just like a lot of assets, it’s gone through a life cycle and needs to be upgraded and transitioned or it will become obsolete,” Mr Murchie said.
The building is currently 66 per cent occupied with a weighted average lease expiry of 2.4 years and around 2400 sq m of vacancy. All currently vacant tenancies have been vacant for a full 12 months.
Rents when Forza Capital bought the building were around $585 per 600 a sq m gross with no outgoings recovery. It is now leasing at $625 a sq m gross with some recovery. Incentives are about 40 per cent (primarily fit out), with interest from “one group for 600 sq m and two other groups, with between 1500-2000 sq m of vacancy taken up.”
Mr Murchie says that it’s a competitive market. “It’s a tenants’ market. But we can reposition assets and make them more sustainable, while commercially still meeting the market.”
Tenants currently include SEQ Water, MOQ Limited, Ramsay Healthcare, The Women’s Imaging Group, Integral Group Queensland and Futuro Financial Services, and occupation is during business hours.
Mr Murchie said it was important that tenants can understand the importance of aligning with efficiency in terms of services like water and cooling. Without that alignment, the building operations may not be environmentally sustainable. There is no after hours airconditioning for any tenancy, and there is no diesel fuel used in the building.
The refurbishment is an addition to Forza’s existing portfolio of upgraded office buildings with 5 Star target NABERS ratings.
“We can take these buildings where they can go, to the maximum performance they are capable of… improve aesthetics and overall longevity, reduce obsolescence, and bring them into the modern era.”