The policy has immediate effect with a target to achieve full compliance by June 2020.

The GREP targets broad range of areas to drive resource efficiency in NSW Government agencies in the four main areas of energy, water, waste and air emission including:

• Reporting resource consumption and waste
• Targeted energy savings
• Mandating minimum NABERS ratings for energy and water
• Minimum standards for electrical and water using appliances and equipment
• Minimum standards for new buildings and fitouts
• Solar targets
• Minimum fuel efficiency vehicle standards
• Purchase of GreenPower
• Emissions standards for fixed plant and equipment
• Low VOC materials

You can access the full policy here. Similar requirements are in place for most States and the Australian Government.

Napier & Blakeley can assist with:

• NABERS improvement plans (including energy efficiency assessments and CAPEX plans)
• Accredited NABERS Independent Energy Design Review for Commitment ratings
• NABERS and CBD Assessments
• Building control and operational tuning
• Independent Measurement and Validation services (Certified Measurement and Verification professional), Including for EUA, ESCO and ESPC agreements
• General Sustainability advisory services (NABERS, Green Star, WELL, GRESB)
• Condition and Lifecycle reviews
• Asset and Facility Management advisory services

For any further information on this please contact:

IAN GARDNER Associate Director m.  0488 225 569 e.   igardner@napierblakeley.com

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For 34 years Napier & Blakeley have been providing the following services to the property industry:

• Property Acquisition & Disposal Technical Due Diligence
• Property Development Due Diligence
• Quantity Surveying
• Capital Expenditure Forecasting
• Make Good Reporting
• Energy Management
• Development Monitoring
• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY

	Alastair Walker Managing Director m. 0419 503 289 e.  awalker@napierblakeley.com		Peter Hammond Director m. 0419 980 901 e.  phammond@napierblakeley.com
	Peter Osborn Director m. 0439 765 571 e.  posborn@napierblakeley.com		Stephen Cooke Associate Director m. 0409 228 552 e.  scooke@napierblakeley.com

MELBOURNE

	Craig Smith Director m. 0407 371 664 e.  csmith@napierblakeley.com		Rob Howells National Director m. 0437 649 082 e.  rhowells@napierblakeley.com
	John Mathew Director m. 0414 559 326 e.  jmathew@napierblakeley.com		Ian Gardner Associate Director                            m. 0488 225 569 e.  igardner@napierblakeley.com
	Richard McOmish Associate Director m. 0409 478 460 e.  rmcomish@napierblakeley.com

BRISBANE

	Paul Mazoletti National Director m. 0408 749 202 e.  pmazoletti@napierblakeley.com		Gavin Peach Associate Director                             m. 0412 225 781 e.  gpeach@napierblakeley.com
	Adam Greene Associate Director m. 0409 724 395 e.  agreene@napierblakeley.com		Paul Cosker Associate Director m. 0434 400 107 e.  pcosker@napierblakeley.com

PERTH

	Graham Rigby Associate Director m. 0419 847 998 e.  grigby@napierblakeley.com		Nick Taylor Senior Associate                         m. 0418 337 225 e.  ntaylor@napierblakeley.com

ADELAIDE

John Mathew Director                                                                                             m. 0414 559 326 e.  jmathew@napierblakeley.com

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In the last year Napier & Blakeley

It’s rare to find nothing that would be considered problematic for an incoming owner, but the last few years there have been a few issues that have become commonplace through either lack of ongoing investment and maintenance or as a result of new market legislation.

The GFC brought substantial financial constraints to the entire economy but for property owners it brought pressures through loan to value ratios (LVR’s), reductions in value and rental income. This created a catch 22 situation where many knew they had to keep maintaining and spending capital to keep their assets compliant, relevant and therefore rentable, but were unable to directly fund or borrow funds to do so.

We recently re-analysed an asset that we had prepared due diligence and capex forecasts for a few years ago, and the list of items that we identified in our initial report were almost completely the same as now. Nothing had been fixed, maintained or repositioned. So, many years down the track the asset has fallen deeper into redundancy and therefore costs more to rectify.

The other more recent trend that has pretty well become standard during due diligence is the of analysis of energy consumption and modelling future asset potential to reduce energy. This trend is driven by rent, NABERS disclosure legislation and also with the future cost of energy in mind.

Over the last 2 years the federal Government ran the Green Building Fund initiative which provided up to 50% of the expenditure required by an owner to sustainably retrofit their asset.

This initiative was worth approximately $120m so therefore an overall value of retrofitting projects of $240m. We estimate conservatively that there could be well in excess of $2b worth of retrofit requirements, especially when you consider that 35-40% of the rental marketplace are Government type tenants that require minimum 4 to 4.5 star NABERS rated assets to lease. As an example, there are many Premium and A Grade commercial offices that are substantially below that level of rating, some hovering at around a 1 star NABERS rating.

Contact

If you want further information on due diligence and capital expenditure forecasts, or any other Napier & Blakeley services please contact any of our offices below:

Melbourne - Rob Howells            03 9915 6300             rhowells@napierblakeley.com
Sydney – Gavin Peach                02 9299 1899              gpeach@napierblakeley.com

Napier & Blakely services:

• Technical Due Diligence
• Capital Expenditure Planning
• Quantity Surveying
• Strategic Asset Management
• Building & Sustainability Consulting
• Property Depreciation

Reduced Life Expectancy and Premature Capex
Recent technical due diligence and condition assessments have also found that the lack of R&M and Capex budgets for economic life driven plant and equipment overhauls and refurbishments has resulted in increased short and medium term Capex.

To put this in context, without appropriate R&M, major plant items may have an economic expected life of (say) 25 years, however the reduction of removal of maintenance can result in a major shortfall in expected life to around 15 years.

The Reaction
Astute purchasers have become aware of this risk and look for these patterns in their technical due diligence reporting to ensure that appropriate Capex costs are factored into the purchase price to account for a vendor’s R&M expenditure shortfalls. 

Condition assessments, maintenance reviews, energy assessments and risk weighted strategic Capex forecasts have become 2010’s essential tools for good asset and facility management and sustainable property solutions. 

Risk of Non-Compliance 
New legislation requires that most commercial office property will be required to have a formal energy performance rating in the next few years and many will require this imminently or in the next few months.  This Legislation has caught most by surprise.  The Building Energy Efficiency Disclosure Act 2010 has just been introduced with transitional provisions (1 November 2010 to 30 October 2011) requiring the disclosure of a building’s energy performance through a NABERS Energy base or whole building rating, for all commercial office property with a net lettable area of 2,000sqm or more that is offered for sale or lease. 

Anxious Vendors
With fines in excess of $100,000 for breaches of the Act’s obligations; including advertising the property for sale or lease, after November 1 2010 without an appropriate NABERS Energy rating, there is significant anxiety in the market place.  The latest information from the Department of Climate Change and Energy Efficiency (DCCEE) will surely increase anxiety levels, as they have confirmed that neither exemptions nor extensions will be granted for lack of knowledge or where assessments are currently underway but not yet completed.

 It will be interesting to see how owners, selling and leasing agents and DCCEE react. 

Astute Purchasers
The story doesn’t end once the rating has been achieved.  Purchasers want to know about the processes and procedures that owners have in place, the potential risks of maintaining the rating at the current level and what plans are in place, or could be implemented, to improve the rating, perhaps strategically in line with planned Capex or future lease expires.

Such initiatives are considered in terms of funding opportunities, reduced energy costs, pay back periods and commercial outcomes. 

Published in the Brisbane Legal Magazine November 25, 2010

………

Using depreciation as a way to encourage the greening of the build environment has been a hot topic for a number of years. During the recent federal election the Labor party announced policies that included the delivery of such incentives.

Last week via their web site Labor provided a little more flesh to their approach in this area.

We outline the salient details below:

• Scheme starts from 1 July 2011 – 30 June 2015.
• Applies to Retro-fits of existing buildings.
• Applicable to buildings 2 Star NABERS rating or lower looking to achieve 4 stars or higher.
• Available for Office buildings, Hotels and Shopping Centres.
• Provides a 50% increase in deductions over the life of eligible assets.
• Anticipated cost $1bn.

How does it work?

• The scheme will run in the same manner as the recent investment allowances scheme.
• From the 1 July 2011 applications will need to be made to the Government for review and approval prior to any works taking place.
• NABERS assessments will be required before the works commence.
• Upon completion of the works 12 months will need to pass to enable a post construction NABERS assessment to be completed.
• Application with results will need to be submitted to the Government for approval.
• Claim for depreciation may be made with approval in that year accounts.
• Depreciation claims that would otherwise be available can be claimed from the date of practical completion.

The Good

• Fairly generous deduction available given the scale of likely expense to achieve a two star rating increase.

The Uncertain

• This is a proposal and not final legislation.
• There is no current indication what assets will be considered eligible for the 50% allowance.
• The $1bn may be capped by the Government so fewer projects may be eligible.
• How the Government will effectively assess applications.
• Likely to take 3 – 4 years before the incentive reaches owners returns.

Napier & Blakeley’s head of sustainability Roger Walker is one of the members of the committee reviewing the assets that will be included within the scheme.

Napier & Blakeley will keep you informed as more information comes to light. In the mean time should you wish to discuss the above article or any other matters relating to Sustainability or Tax Depreciation please does not hesitate to contact us at Napier& Blakeley.

NSW / ACT / WA / NZ  -  Roger Walker, Alastair Walker -  02 9299 1899
VIC /  SA  / TAS  -  Peter Frith, Rob Howells -  03 9915 6300

……..
Today the Australian government announced that mixed use buildings will be excluded from the CBD legislation for a period of twelve months and major new refurbishments will have a two year exclusion from date of refurbishment.

Following industry consultation the Australian Government Department of Energy Efficiency  and Climate Change set up an industry forum to review the implementation of the Commercial Building Disclosure legislation (mandatory rating legislation).

This group includes Roger Walker, Head of Sustainability at Napier &  Blakeley. We are pleased to advise that Roger’s advice that the legislation should exclude buildings which do not have a minimum of 75% office use has been accepted by the Hon Minister Combet.

The legislation which looks to enable comparison of energy performance of office space will now exclude mixed use buildings, this releases most industrial and retail premises which have an office component over 2,000sqm from the requirements of the legislation for a period of twelve months.

The Department announced today:

” The Government has worked with industry stakeholders to address these complex issues and decided as an interim approach that buildings with less than 75 per cent office space (of the net lettable area 1), will not be required to disclose a NABERS Energy rating. This approach to mixed use buildings is an interim measure during the transition year of the program and will be subject to review by a panel of industry experts. This panel will report back to the Government before the end of July 2011 on their recommendations. Industry will be given clear advice and an appropriate time frame to adapt to any changes, recognising the possible need for metering changes and collection of 12 months data for a NABERS Energy rating.” 

This is a positive move and ensures that the intent of the legislation, to provide comparative ratings for office space, is delivered, with the buildings which are impacted by other uses being excluded.

Whilst parts of the industry would like to see the exclusion as permanent the transition period provides mixed use building owners with a period to review the impact and assess costs to implement metering and other changes to ensure that their office areas can be comparatively assessed against predominately office buildings. Owners in this mixed use category will still need to review their strategy quickly as changes to metering and other areas will take twelve months from implementation to be fully accounted for in a NABERS Energy rating.

Importantly transactions underway and in the pipeline will now be able to move forward without the risk of non compliance or further delay of the transaction for the completion of compliance under the Act. This will alleviate some legal costs and risk reviews for these impacted transactions where the details to obtain a NABERS Rating are not easily met.

To read more information on the legislation and to find out what is needed for NABERS rating please click here to review our earlier update http://napierblakeley.info/sustainability/commercial-building-disclosure-cbd/

Further information on the CBD program, including the amended Determination, is available at www.cbd.gov.au or e-mail Napier & Blakeley for a copy.

Roger Walker, Head of Sustainability at Napier & Blakeley is a representative on the Commercial Building Disclosure Implementation Forum, a representative on the NABERS Stakeholder Advisory Committee, Chairs the ADPIA Sustainability Committee, is a member of the APREA Sustainability Committee, is a registered Valuer and Associate of the Australian Property Institute and works with other industry organisations, business groups and client strategy groups.

Napier & Blakeley can provide you with strategic portfolio planning advice, applications for funding and complete your NABERS ratings for you.

For more info please contact your local office.

NSW / ACT / WA / NZ  -  Alastair Walker -  02 9299 1899
VIC /  SA  / TAS  -  Peter Frith, Rob Howells -  03 9915 6300

Napier & Blakeley offer a wide range of consultancy services that will help you deliver  a more efficient and marketable solution for your property. Our services include:

• Energy assessments      
• Sustainable design advice
• Government Funding advice
• Project financing options
• Cost Planning and Life Cycle analysis
• Project Management
• Property Tax profiling

Government Funding & Project Finance

Napier & Blakeley have successfully raised on behalf of its clients over $5 million of green building government funding in the past 18 months alone.  In some cases this was up to 50 % of the actual project cost.  Napier & Blakeley, through an associated party, may also be able to provide project finance for the sustainable property solution if required.

Delivering Extraordinary Projects

Napier & Blakeley can manage the project right through to the completion of the upgrade. Some recent projects where we acted as Project Director include:

North Ryde office building NSW:

• Largest office solar energy plant in Australia
• Emission reduction of 40%

North Sydney office building:

• Target to be the lowest emission building in Australia
• Tri-generation
• 70 % reduction in current emissions
• Upgrade carried out while building fully tenanted.

Tackle rising energy costs

With electricity costs forecast to rise substantially  over the next three years, or even higher if an emissions tax is introduced.

Contact Napier & Blakeley now to see how you can address this issue.
VIC – Rob Howells – 03 9915 6300 or rhowells@napierblakeley.com

If you are considering upgrading and applying for a Green Building Fund Grant for your Hotel then we can assist you in this process. Napier & Blakeley have been successful in obtaining over $5M in funding for our clients in the previous Green Building Fund rounds.

The Hotel NABERS Energy rating is not applicable for all hotels and you should consider the following when reviewing the requirements to obtain a rating.

Requirements For Completing An Assessment

NABERS Energy and Water for hotels is designed for business hotels within Australia. Business hotels have the following characteristics:

• At least 50% of rooms have little or no in-room cooking facility
• At least 50% of rooms are sold on the basis of a single guest per night, typically with short stays
• Heated pool facilities typically limited to less than 200m² surface area
• No dedicated on-site overnight accommodation for staff
• Often located within urban areas

These characteristics are not exclusive and it is not intended for Accredited Assessors to specifically assess these except if required in the interpretation of a rating. While it may be possible to rate other hotels types such as a resort hotel using NABERS for hotels, the resultant rating will not be a reliable indicator of the hotel performance.

NABERS for hotels is a comparative tool which measures and benchmarks hotels water and energy consumption against the market average. The rating includes energy and water used by all facilities provided for the utility of hotel guests and the associated back-of-house requirements and specifically includes:

• Hotel rooms
• Conference facilities
• Laundry services within the hotel either for back-of-house or guest use
• Food services within the hotel floor-plate that have charge-to-room facility
• Gyms and pools for guest use
• Other guest services, such as a beauty treatment or business centre within the hotel floor plate that have charge-to-room facility
• Hotel back-of-house areas including hotel-only offices, meeting rooms and staff facilities
• Hotel lobby
• All vertical transportation used in the access to the hotel lobby, facilities and rooms

NABERS for hotels exclude areas, services, functions and energy consumption that are associated with “non-hotel” activities. Therefore NABERS for hotels does not include areas, and the associated energy or water use associated with:

• Retail outlets that are separately leased and managed
• Café’s, restaurants and other food services that do not have charge-to-room facility
• General leased office space not used directly by hotel operations
• Car parks available to the public which are not provided for the specific use of the hotel
• Major equipment primarily serving non-hotel occupants or non-hotel uses (e.g. telephone exchanges, computer systems servicing external networks and specialist communications equipment).
  These are dealt with by exclusion of energy or water use by applying the various protocols during the assessment.

NSW / ACT / WA / NZ  -  Alastair Walker, Rod Clarke -  02 9299 1899
VIC /  SA  / TAS  -  Peter Frith, Rob Howells -  03 9915 6300

Lack of Capital post GFC has lead to a significant neglect of R&M and Capex spend.

Having worked on property due diligence valued over $10B since the GFC, Napier & Blakeley have seen only nominal spend on upkeep compared with previous years.

Risk of Non-Compliance (i)

During this period the increasing trend has been a notable reduction of Repair and Maintenance (R&M) and Capital Expenditure (Capex)  budgets. Whilst this strategy may have been necessary in some circumstances e.g. postponement of non-essential Capex, we have found too commonly evidence of non-compliance regarding statutory maintenance such as testing, auditing and reporting of essential safety measures and fire safety systems.

Reduced Life Expectancy and Premature Capex 

Recent technical due diligence and condition assessments have also found that the lack of R&M and Capex budgets for economic life driven plant and equipment overhauls and refurbishments has resulted in increased short and medium term Capex.

To put this in context, without appropriate R&M, major plant items may have an economic expected life of (say) 25 years, however, the reduction or removal of maintenance can result in a major shortfall in expected life to around 15 years.

The Reaction

Astute purchasers have become aware of this risk and look for these patterns in their technical due diligence reporting to ensure that appropriate Capex costs are factored into the purchase price to account for a vendor’s R&M expenditure shortfalls.

Condition assessments, maintenance reviews, energy assessments and risk weighted strategic Capex forecasts have become 2010’s essential tools for good asset and facility management and sustainable property solutions.

Risk of Non-Compliance (ii)

Legislation requires that most commercial office property will be required to have a formal energy performance rating in the next few years and many will require this imminently or in the next few months.

This Legislation has caught most by surprise.

For purchasers and owners it is now important to understand where a property currently sits from a formally rated energy performance perspective.

It is also important to understand how the rating can be maintained at the same level over a period of time, and how it can be strategically and cost effectively improved to avoid future obsolescence.

The Building Energy Efficiency Disclosure Act 2010 is on the cusp of taking effect. The transitional provisions (1 November 2010 to 30 October 2011) require the disclosure of a building’s energy performance through a NABERS Energy base or whole building rating, for all commercial office property with a net lettable area of 2,000m² or more that is offered for sale or lease. However, with only 388 commercial office buildings registered nationally to date, it would seem the message may not have reached all concerned parties with property interests that fall under the Act’s disclosure requirements.

Anxious Vendors

With fines in excess of $110,000 for breaches of the Act’s obligations; including advertising the property for sale or lease, after 1 November 2010 without an appropriate NABERS Energy rating, there is significant anxiety in the market place.

The latest information from the Department of Climate Change and Energy Efficiency (DCCEE) will surely increase anxiety levels, as they have confirmed that neither exemptions nor extensions will be granted for lack of knowledge or where assessments are currently underway but not yet completed.

It will be interesting to see how owners, selling and leasing agents and DCCEE react.

Astute Purchasers

The story doesn’t end once the rating has been achieved. Purchasers want to know about the processes and procedures that owners have in place, the potential risks of maintaining the rating at the current level and what plans are in place, or could be implemented, to improve the rating, perhaps strategically in line with planned Capex or future lease expiries. Such initiatives are considered in terms of funding opportunities, reduced energy costs, pay back periods and commercial outcomes.

For more information on Technical Due Diligence, Capex Forecasts, NABERS Ratings and Sustainable Property Solutions contact Napier & Blakeley.

NSW / ACT / WA / NZ  -  Alastair Walker  -  02 9299 1899
VIC /  SA  / TAS  -  Peter Frith, Rob Howells -  03 9915 6300

How do the new rules work ?

Sellers or lessors of office space of 2,000 sq metre (21,530 sq ft) or more will have to disclose an up-to-date energy efficiency rating. Starting from Nov. 1, owners will need an energy rating from the National Australian Built Environment Rating System (NABERS) when leasing or selling. When putting properties on the market, advertisments should include the ratings. The NABERS rating measures energy performance on a scale of 1 to 5 stars with the median market performance currently at 2.5 stars.

After a one-year transition period, building owners will be required to provide further information such as an assessment of tenancy lighting.     Failure to comply with the regulations, could mean a civil penalty at a maximum of A$110,000 on the first day, with an additional daily fine of A$11,000 thereafter.  The building sector accounts for 19 percent of total energy consumption in Australia and is responsible for 23 percent of green house emissions.

 The recently elected government of Prime Minister Julia Gillard has made proposals on funding aids including extending a Green Building Fund with A$30 million available ($29.56 million) for new applications and offering tax allowances when upgrading energy efficiency, according to property consultancy firm Napier & Blakeley.

What about foreign investors and reits ?  

Foreign investors who own buildings in Australia are also subject to the new regulation including those using a managed investment trust (MIT) structure, a popular method that makes buyers eligible for tax benefits.  They will be subject to the mandatory energy disclosure rules if they sell or purchase a whole building, or let or sublet all or part of a building. If, however, they own only part of a building and wish to sell their stake, they do not need a NABERS rating.

 Foreign investors have been active buyers in Australia, despite global financial uncertainty, scooping up $1.7 billion of assets in the 12 months to June this year, and are responsible for 70 percent of the overall transactions in Australia.  Some property trusts, have already raised capital to beef up their balance sheets and to prepare for the new rules.

Dexus Group has launched a programme to undertake A$40 million worth of capital work to upgrade average portfolio NABERS energy rating from 3.3 stars to 4.5 stars by 2012.

GPT’s portfolio rating of NABERS Energy is 3.7 and it has committed to lift the rating to 4.5 in 2011, while other major office REITs have similar targets.

How rents, values will be affected ?

A U.S. study showed buildings with a green rating commanded rental rates that were roughly 3 percent higher per square foot than otherwise identical buildings. Selling prices of green buildings were about 16 percent higher, according to the study done last year by scholar Nils Kok of University of California, Berkeley, and others.

There have been no similar studies done in Australia yet.

“The big issues are around avoiding future risk of obsolescence, tenant attraction and retention, risk and adequate forecasting of capital expenditure,” said Mark Willers, senior valuer at CB Richard Ellis. Willers said A-grade and B-grade office buildings should generally be able to achieve a NABERS Energy rating of 3.5 to 4 stars by fine-tuning existing plant and systems but it could become costly if they aim for higher ratings.

“The ability of a building to achieve NABERS Energy ratings in excess of 4 stars will depend on its configuration and construction, and may require significant capital works,” he said. The government data shows the cost of upgrade from 2 to 3 NABERS star ratings could range from A$35-A$61 per square metre.

The green drive is likely to accelerate as government entities, which occupy about a third of Australian offices, have pledged to take up buildings with NABERS rating of 4.5 star or better for their offices by 2011.

The stock however of buildings with 4.5 stars and above remains scarce, representing about 11 percent of the overall national market, according to the government data.

By Eriko Amaha -  SYDNEY, Oct 11 (Reuters)

The short answer is yes it does, with direct financial support for improvements in emission reductions for commercial buildings.

Election promises impacting the commercial property industry were:

• Green Building Fund extension (now office, retail and hotels that can be NABERS Energy rated) with $30Million dollars available for funding for new application rounds from now until July 2011.
• Tax allowance bonus for Green building improvements, for office buildings, Retail Centres (over 10,000sqm) and Hotels. Conditions will apply, but if you meet them then this is a 14.5% reduction in project costs for improving energy efficiency.

With the details yet to be defined by the responsible departments we assume that the green building fund mark 2 will be delivered fairly quickly and with their previous rounds offering around $15million per round then another two rounds should be undertaken. Perhaps one for January and one for April 2011, which allows for time to set up and then for all funding agreements to be finalised before the tax allowance bonus commences in the following financial year.
The conditions of the tax allowance bonus for Green building improvements will need to be very clear to ensure the financial benefits can be guaranteed for an owner when undertaking a project. Industry consultation for this should commence straight away on the details for this legislation.

The main condition of performance to be eligible for the tax bonus in the election promise was that the works must move a building from a 2 star or lower NABERS Energy rating to a 4 star or higher NABERS Energy rating. Industry input into the criteria for meeting the tax bonus requirements will be required to ensure this policy does encourage investment. On the surface as it stands now, the cost to guarantee the energy improvements will outweigh the benefit received, so this may be as it states, a bonus, rather than an incentive to upgrade your property.

It all moves to NABERS Energy ratings

With the Commercial Building Disclosure (CBD) legislation in place from November 2010 we will see all advertisements for commercial office space over 2000sqm stating the NABERS Energy rating. The funding available federally under the Green Building Fund and tax bonus are dependant on NABERS Energy ratings. Commercial building owners must understand their portfolio energy performance and be working to a strategic NABERS performance strategy, embedding this in contracts with building contractors and building managers.

Costs to upgrade for energy improvements

From our work with environmental strategy and completion of a number of recent commercial building upgrades, when you isolate the energy improvement works the numbers vary from site to site and an order of costs is difficult to assess.

Projects we have recently completed or are under way which are targeting existing buildings to improve to 5 star NABERS Energy range from $50 to $150 psm. For an exemplar building targeted to be the lowest emission multi tenanted building in Australia the costs are coming in considerably higher with the tri-generation system and other emission reduction technologies added to the best practice upgrade. At the top end of the cost scale, would be an early 1970s building requiring new energy and HVAC systems throughout. The cost can be considerable and by this we mean around $600psm and you would want a vacant building to undertake the required work.

Technology and payback analysis

In assessing technology and payback you need to review not just the emission savings but also the impact on water use, outgoings, available funding and most importantly the impact on tenants indoor environment quality.

A review of indoor environment quality impact with the implementation of a dedicated outdoor air handling system with humidity control and energy reduction benefits has shown a significant impact to the improvement of the working environment to tenants but how you calculate the benefit for the payback analysis alters depending on a number of issues such as lease profile, tenant profile and existing NABERS Energy Rating.

A tri-generation system has a significant impact on emission reduction but should you be looking at a multi engine system with undetectable NOx and SOx such as Bennett Clayton engines and how can you size this to create an option for future tenants to obtain their low emission power? We selected this as a first for NSW Local Government Super at 76 Berry Street and as a first use of this technology for a tri-generation installation this gained the exemplar funding under the green building fund.

If you are looking at lighting improvements you need to assess the impact now of the Building Energy Efficiency Certificate (BEEC) and the tenancy lighting assessment within this which you will need to provide publically. Will a few watts per square metre make a difference to a tenant considering a lease or will quality and compliance to Australian standards be more important in their decision making process?

Rating and Funding Advice.

In the first 5 rounds of the Green Building Fund (Round 6 is yet to be released), Napier & Blakeley achieved great success with GBF applications for our clients, securing over $5M of funding for clients including obtaining one of only two awarded exemplar project funding.

Napier & Blakeley can provide you with strategic portfolio planning advice, applications for funding and complete your NABERS ratings for you.

For more info please contact your local office.