The seventh annual NABERS Sustainable Portfolios Index is another major step on the path to decarbonisation of the built environment. There are new metrics, new entrants and a growing understanding that this vital measurement tool contributes to ever improving performance.
In a sign that success is not just these days confined to the largest Australian property funds, one of the star performers in the 2025 SPI is Illawarra-based portfolio owner, Quality Green Group.
QGG achieved first place in the Office Energy category and third place for Office Water. Its office portfolio achieved 6 Star average NABERS energy rating and 5 Star average NABERS water rating, with 100 per cent of the portfolio.
Among the major winners was Cbus Property performed ahead of all other office portfolios in the SPI across most categories, appearing in the top three for Office rating types, Energy, Waste, and IEQ (indoor air quality).
Other leaders in the SPI include Walker Corporation, which ranks second for Office Energy with a 5.6 Star NABERS Energy rating for its Parramatta Square Portfolio.
For Office Water rankings, Lendlease took the top spot with its Barangaroo International Towers, which scored 5.9 Stars NABERS Water, and Charter Hall scored first place for NABERS Office Indoor Environment Quality with 6 Stars across the entire Charter Hall Wholesale Property Trust (CHWPT).
In the Office Waste category, REST Nominees’ Rest Direct Office Portfolio ranked at number one with a 4.9 Star NABERS waste average across all assets.
Retail portfolios also showed excellent form, with QIC Real Estate’s Active Retail Property Fund topping the leaderboard for NABERS Shopping Centre Energy at 5.9 Stars, and LaSalle Investment Management leading the rankings for NABERS Shopping Centre Water with a 4.5 Star result across the BVK Global retail centre assets.
For the first time, hotel portfolios have also been included. Singapore-based CapitaLand and private Australian property fund, Schwartz, both entered portfolios in the SPI.
In total, 30 companies representing 67 portfolios comprising 48 commercial office portfolios, 16 shopping centre portfolios and three hotel portfolios took the step of disclosing whole of portfolio performance.
Transparency and courage
As Magali Wardle, NABERS head of market development notes, the voluntary nature of the index makes it a tangible ESG achievement to be included. It shows “willingness and bravery”.
“Organisations choose to list their portfolios in the ranking, and in doing so, they’re really showing a lot of leadership in wanting to be very transparent about the performance of their assets.”
She observes that some companies such as Charter Hall, Dexus, GPT and QIC Real Estate list multiple portfolios, not only the top performers, by taking an “all in” attitude.
“Those companies just should really be commended and celebrated for being so open and transparent.”
The number of participants has also been growing year on year, both through expanding the number of companies listed and the sectors included.
“The results also show that small companies and large companies can all achieve excellence,” Wardle says. “It is great to see the NABERS Sustainable Portfolio Index provides a place to celebrate all of those different portfolios.”
New renewable energy indicator
This year the SPI also incorporates a renewable energy indicator showing the progress a company or portfolio is making with electrification and green energy procurement, whether on-site or off-site or a mix of the two.
“That’s another really important consideration,” Wardle says.
“Energy efficiency takes us part of the way to decarbonisation, but we also need to look at fossil fuels and renewable energy. The renewable energy indicator is now looking at the next two steps that move away from fossil fuel and the move to 100 per cent renewable energy.
“And what we are seeing is some portfolios are really well on their way, like we’ve got some that are around that 90 per cent in terms of the renewable energy indicator. But there’s still a long way to go, not all the portfolios are there yet.”
Government procurement playing a role
Another insight from this year’s SPI is sustainable asset performance has become more important for non-premium office assets such as smaller, regional office buildings.
For example, at least one of the QGC regional office assets has government tenants, and Wardle says this is helping drive the importance of sustainability.
“There’s a link to government procurement policies and the targets that they’re setting, and that in itself has driven buildings to do better, to be competitive and to attract those long term government tenants.”
Trends in the hotel sector
This is now filtering into the hotels sector also, with public sector procurement aligned to government policies such as the Australian federal government’s APS Net Zero Emissions by 2030 program, which specifically mentions travel procurement as an operational area where NABERS ratings of potential hotels should be considered.
The NSW government has also just released a procurement policy, which is likely to increase demand for sustainable government travel destinations.
There are not yet targets for minimum NABERS ratings but even so, it’s a signal to what is on the way, Wardle says.
In general, sustainability is becoming much more “important and prevalent” across the Australian hotel sector.
This is due to both customer demand and coming from the other side of investor expectations around minimising emissions and other impacts.
This stems from companies with global ownership, which also adds to tougher requirements.
Trends in retail
In the retail sector, NABERS is seeing a trend for more asset owners to rate the entire portfolio, with twice as many entrants into the SPI having 100 per cent ratings coverage for NABERS Energy.
“It’s that commitment to making sure that they’re measuring and managing the performance of those shopping centres and being really transparent about it too,” Wardle says.
It takes a value chain to raise a rating
The publication of the SPI is also a chance to recognise and celebrate all the people involved in achieving improved asset performance across the whole value chain of the buildings.
“From the facilities managers and the engineers onsite to the asset managers, all the way up to the portfolio managers and the investors – they’re doing a lot of heavy lifting and a lot of hard work to actually help Australia reach its net zero targets.”
The SPI also delivers a practical benefit for both participants and property industry stakeholders.
“Investors use the index to look for high performing portfolios,” Wardle says.
“We get quite a lot of questions from investors, clarifying details and related issues. Asset owners use the index because they like to track the performance of the portfolio over time and show that to their investors and their shareholders and their stakeholders.
“So that’s one of the great things about the SPI is that if portfolios participate over a series of years, we actually provide them with a trend that shows how the average NABERS rating has changed.”
