Would you lease office space with a zero Star NABERS rating? We couldn’t help but wonder who would, when last week we spotted an office in the Brisbane Club Tower being offered for lease by Colliers in Brisbane with a zero NABERS rating.
The agent, Andrea Cano, Colliers senior executive Brisbane CBD told The Fifth Estate NABERS ratings “are not really a thing” for Brisbane tenants looking for space.
This was alarming, so we did a little digging and consulted some experts.
As usual all is not as it first appears.
There are some good reasons for this lackadaisical approach.
First and most significant is that Queensland doesn’t seem to care.
Queensland’s Housing and Public Works website, states that the department has a target to achieve a 5-star NABERS energy rating across all owned and leased properties by 2025. The target for carbon neutral buildings is 2050.
It’s important to note that a “target” does not equate to a fundamental requirement – a must have.
But on the face of it the absence of a clear mandated minimum standard for offices risks the state looking like one of those sub-groups in a sector increasingly concerned about energy consumption – not to mention emissions – that “don’t know don’t care”.
This is significant because of all governments’ undisputed leadership potential when it accounts for a20 to 25 per cent of the commercial office leasing market.
So anything it does is going to have an impact.
If you think not having a policy on NABERS could possibly send a weak signal on energy efficiency to the wider market, you’d be right.
We made enquiries to the Queensland Department of Housing and Public Works, which manages procurement of state government office space.
These went unanswered by the time of publishing.
According to NABERS most of Australian governments have done very well to drive energy efficiency.
It makes good sense, they are spending tax payer dollars to pay to the bills.
A spokesperson said that from 2004, governments across Australia have worked to drive energy efficiency in the office sector by setting minimum NABERS Energy requirements for the buildings they own or lease from the private sector.
“These policies have continued to be refined over the years,” the spokesperson said.
Here’s the proof in the pudding:
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But let’s not write off the entire Brisbane property sector just yet.
WT Consultancy’ sustainability consultant Steve Hennessy says Brisbane’s high vacancy is a factor that needs to be considered, though The Property Council of Australia said that vacancy across the CBD has dropped from 12.9 per cent to 11.9 per cent in August and JLL said in October it had fallen to 10.9
“The secret to a good rating is to maximise your area, maximise your time and minimise your energy,” Hennessy said.
“Effective area falls at times of vacancy – if the energy consumption does not fall by a similar proportion, your energy rating will go down”.
In other words if you have a third of your building empty then the energy intensity of the space that is occupied will look a lot lower than if the building was fully occupied.
In addition we understand some agents insist on the aircon left on through the whole building so it feels cool when they take prospective tenants through.
Then there is zoning control.
Poor zoning in a building with high vacancy will also impact negatively on the energy profile, Hennessy says.
Agents driving HVAC use in empty space
But while the government seems to not care to have a minimum energy efficiency standard Hennessy says tenants do care.
“The bigger tenants certainly, who are out there telling their stakeholders that they are good corporate citizens, know it is a bad look if they are called out for being associated with a poorly performing building, so why take the risk?
“It’s a brave tenant that says ‘we don’t care about the environment.
“Good building owners have long understood this.”
Then there is the cost.
“Building owners recognise that poor-performing buildings have higher operating costs and lower returns.”
But we still need governments to set the pace.
Francesca Muskovic, Property Council of Australia’s national policy manager – sustainability and regulatory affairs, says government procurement has been “transformational” for the office sector in terms of driving improved building performance.
“We saw a step-change in performance,” she says as first the federal government and then some of the state governments put in place policies mandating minimum NABERS ratings for leasing space.
The advent of the Commercial Buildings Disclosure program also added to the momentum and the industry saw “unprecedented levels of improvement” in commercial building energy efficiency.
That’s the upside.
On the flip side, many state and federal departments are only paying attention to the base building rating of the buildings they occupy – not their tenancy rating.
And obtaining tenancy energy ratings has not been high on the agenda for many state and federal departments.
Many have policies committing to obtaining ratings, however, Muskovic says there has been “quite poor compliance” and in general minimal public reporting of tenancy ratings.
The Fifth Estate examined the NABERS data of published ratings and found that there do appear to be many state and federal departments not appearing in the list of 153 current tenancy energy ratings.
The Australian Tax Office, Department of Human Services Australian Federal Police, Transport NSW and Department of Foreign Affairs and Trade along with many of the Canberra-based federal departments appear to be the main federal tenants stepping up to the plate.
State government entities such as Transport NSW appear to have the highest number of rated tenancies.
Muskovic says that public sector entities are also currently slow on the uptake when it comes to the new NABERS Co-Assess option.
When it comes to Whole Building Ratings, Property NSW is the star performer, with NABERS energy ratings even for small commercial office buildings in far-flung regional locations including Cootamundra, Moree, Dubbo, Parkes and Broken Hill.
Muskovic says that given the agreement of the COAG energy ministers to the Trajectory for Low Energy Buildings, and the number of zero carbon targets in some state government policies, ratings on tenancies is a tangible and important step that governments can implement right now.
It would also show the type of leadership recommended in the Every Building Counts strategy released this week by the Property Council and the Green Building Council of Australia.
UPDATED 6 November 2019: This article has been updated to reflect a NABERS policy for the NT and a target for one Queensland department around NABERS