Independent fund manager Castlerock Property has notched up a portfolio of mainly government tenanted office buildings with almost all meeting high environmental standards, with ambitions to go even further.
This previously little-known company manages assets on behalf of unlisted property investment trusts including Auslink Property Trust, which holds 14 Centrelink offices, including regional offices in Western Australia, Queensland, Victoria, South Australia and Tasmania, as well as one in South Brisbane and two in inner-suburban Melbourne.
According to Castlerock chief executive Hank Bronts, the portfolio
of 24 buildings of more than 50,000 square metres in net lettable area around Australia has NABERS Whole Building ratings of at least 4.5 stars, with a number of buildings holding 5 Star ratings, and one with a 5.5 Star rating.
All 18 buildings the company has developed for government tenants either meet or exceed the chosen benchmark, he says.
Bronts puts it down to an “embedded approach” to sustainability that extends to keeping a close eye on performance standards. For instance, while tenants pay for lighting, the company will call tenants and alert them if their energy bills are outside the norm, because keeping track of this is part of achieving the Whole Building rating.
The company was an early adopter of NABERS ratings, with the first acquired for an office in Werribee in 2008.
Bronts says that when an existing building is being acquired, it must have either a Whole Building rating of 4.5 stars or above, or be brought up to that standard before the tenant takes up occupancy.
A recently acquired six-level building in Wollongong for example, with more than 9000 sq m of NLA, already had the qualification at the time of purchase.
If the building didn’t meet the standard, Bronts says, the company would have offered a lower purchase price to allow for sufficient budget to bring it up to standard.
This approach has advantages in attracting and retaining government tenants.
“We are driven by providing tenants with an asset that performs,” Bronts says.
In more than 10 years, the company has not had a tenant move out of any of its 24 managed buildings.
Bronts says there have been other benefits. Reputation, for instance, in terms of both investors and potential public sector tenants.
“We are seen as an organisation that provides sustainable buildings.”
This is an advantage in the tender bidding process to provide public sector tenants with purpose-built commercial space for lease.
Adding value through better operational practices
Castlerock is also a building manager, so it pays for whole-of-building HVAC energy, creating opportunities for bottom-line benefit in operational expenditure.
“If we can reduce our energy use by 10 per cent, we increase our profitability,” Bronts says.
To ensure the mechanical systems are energy efficient, variable refrigerant flow HVAC is used in smaller properties, and low temperature variable air volume technology in larger properties.
Passive design is fundamental, and careful attention is also paid during the design process to the lighting and services designs, because tenant energy use will be impacted.
All newer buildings have LED lighting.
Tenants pay for their own energy and lighting, but because a Whole Building rating involves measuring this use, it is monitored closely by the asset management team.
“Every month we compare energy use against what we can use and retain the rating,” Bronts says.
“If tenant energy use goes up beyond what is appropriate, we ring the tenant and tell them they are using too much energy.”
“If tenant energy use goes up beyond what is appropriate, we ring the tenant and tell them they are using too much energy.
“If our energy use has gone up, we go and tune the mechanical services.”
Smart meters are installed, so after hours energy use can also be closely watched. This has identified a number of issues.
At some properties, the cleaners were coming in and switching on the whole building’s HVAC for the two hours they were onsite. Adjustments to HVAC settings were implemented that ensured the system would only partly come on after hours.
Lighting was also proving an issue at some sites because of cleaners’ practices, so a solution was developed of using different security entry cards for cleaners that enabled lighting for just the task at hand, not whole floorplates.
From sustainability to WELL
Bronts says the company’s 15 staff are absolutely positive about the focus on sustainability.
“The staff love it that we are moving forward with this, and they love the way the learning processes involved are increasing their own knowledge.”
For its next purpose built development, he says the plan is to go a step further.
“The next building we do for a government tenant, we will be looking to achieve a WELL rating.
“If we can provide a building that remains relevant to the tenant’s customers and staff – if it engages with them – they will stay in the building longer.”
Elements of the WELL criteria such as having the right indoor air temperature, low or no VOC materials and finishes for indoor air quality and high levels of natural light are already part of the company’s standard approach.
“We do focus on natural light when designing a building, but we have never measured it in terms of our buildings,” Bronts says.
Tackling WELL will mean more upskilling of staff.
“In order to stay in front, we need to keep upskilling.”
Sustainability: it’s about extra time not money
He says achieving sustainability is a case of spending more time on projects, not increasing costs.
For example, as many of the developments are undertaken in more remote parts of the country where subtrades may not have the expertise to deliver buildings to the required standard of performance, the company sends its own site manager to oversee every detail of the construction.
This includes ensuring insulation is installed correctly, that buildings are well-sealed and that shortcuts are taken that might compromise its ability to perform at the high-efficiency standard.
“We act as construction manager, and we engage the subcontractors directly,” Bronts says.
“We do work hard at trying to achieve the best outcomes, even for little buildings in places like Carnarvon.”