Australand has committed to achieving at least a 5 Star Green Star Design & As Built rating for all new industrial, commercial and retail projects, with even speculative 6 Star industrial developments in the pipeline.
The news follows the company announcing Green Star – Performance ratings for its entire portfolio early last month, with an average rating of 3 Stars achieved.
Australand has raised its sustainability ambitions over the past few years, a move which seems to be supported by new parent company Frasers Centrepoint, which took over Australand last year.
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General manager sustainability Paolo Bevilacqua told The Fifth Estate the move was about maintaining a leadership position in the industry.
“We set ourselves a target of 4-star minimum three and a half years ago, and that was self-assessed, and during that time we’ve developed the capability and internally trialled new technology and design solutions.”
Mr Bevilacqua thought that the commitment probably put Australand ahead of its competitors on a portfolio basis, if not a project basis (such as at Central Park) where a series of buildings might be designated to achieve high star ratings.
On green bonds and climate bonds, which were now linked to Green Star – Performance ratings, Mr Bevilacqua said the company was not specifically looking at tapping that market but was definitely “casting an eye”.
“We have some interest in whether our properties qualify against the standards and it’s great to see the partnership that’s been announced between the Green Building Council and the Climate Bonds Initiative announced on Monday.
“We’ve got it on our radar and will look at it more clearly to see how it fits.”
Mr Bevilacqua said the portfolio commitment move was a sign of changing times.
The company in the past would often present a 5 Star Green Star solution to our customers, with variable success.
In recent times, however, even in the industrial space, there had been a distinct rise in interest from customers.
In about four developments the company was developing 6 Star Green Star industrial premises, some of which were on a speculative basis (without precommitted tenants).
However, that was not a major concern, Mr Bevilacqua said.
He said customers had become more aware of green property potential. Prices of new technology had come down so it was less difficult today to achieve a 5 Star rating than it was a few years ago.
“But there are still other barriers to getting there.”
At properties at Horsley Park Business Park and Eastern Creek in Sydney and at Derrimut in Melbourne the company was building 6 Star Green Star complete with geothermal airconditioning, recycled water systems, LED lights, better materials and advanced monitoring system.
The “main technology” he said, “was nothing that groundbreaking”.
What might be seen as more groundbreaking is the level of interest from clients. In contrast to his views in The Fifth Estate of a few years ago the market has moved significantly.
Mr Bevilacqua said clients were now specifying minimum 4 Star industrial buildings in their requirements, which meant that any landlord or agent dealing with them would need to address these issues and be aware of changing demand.
At Derrimut in Melbourne, Ceva Logistics had committed to a 75,000 square metre building attracted by the cost savings on energy and sustainability branding it could attach to its premises. But Mr Bevilacqua said all elements of sustainability had to be present – cost savings, corporate responsibility and branding.
Some of the buildings would be getting close to carbon neutral from an energy perspective, he said.
“A lot of the initiatives are on water quality and materials but a lot of the focus is on energy.”
“You’re in a facility for the long term. When you look at the savings over a long period the additional investment makes sense.”
To some extent Australand also “partnered” in the investment, Mr Bevilacqua said.
With the spec building at Horsley Park, he didn’t think there would be an issue with finding tenants.
“There’s a lot of interest in the property. I don’t see it’s going to be an issue leasing that space. And we like having some spec because it shows exactly what you’re going to be getting.”
So what will a 6 Star industrial building cost? Mr Bevilacqua said market rent, between $75 a square metre in Melbourne to $115 a sq m in Sydney, would be sufficient to cover the investment.
There was even interest around battery storage.
“There’s a lot of activity. I don’t think it’s too blue sky. It will become real fairly quickly.
“I think it’s the right thing for us and for our customers.”
And would Australand be first with 6 Star Green Star? Mr Bevilacqua was not sure. “Probably first, second, third and fourth,” he said.
Australand head of commercial and industrial Sean McMahon said the company was actively working with customers to make sure they understood the economic case for future-proofing assets against energy and water cost rises.
“The cost benefit analysis of achieving Green Star certification stacks up, and we will continue to drive leadership in sustainability across the commercial sector,” he said.
– with Cameron Jewell