In commercial real estate, especially since the pandemic, it’s more critical than ever to ensure that sustainable buildings attract workers back to physical spaces that allow them to collaborate and be more productive in a healthier building.

Australia and New Zealand lead the world in sustainability practices; sustainability is one of the attributes used to measure a company’s value and, as Duncan Murray from The Fifth Estate noted, “…it’s almost like a proxy for the quality of management”.

‘Backseat’ landlords could lose

Many companies, but especially government organisations, now have employee wellbeing as a high priority. Not only do they expect excellent air quality but also, they’re looking for superior temperature control, easy access and more.

Energy efficiency is important when renting commercial buildings; we’ve experienced that lower energy costs are a key factor in attracting high-quality, long-term tenants. These tenants are generally more accepting of paying a premium for greater energy efficiency.

Landlords who neglect to upgrade their commercial buildings could miss out on desirable long-term tenants.

5 ways to make your commercial property more sustainable

Most commercial buildings can be upgraded and adapted for better sustainability. In fact, retrofitting an older building rather than knocking it down and starting from scratch will garner you more points for your Green Star rating.

1. Lighting

Replacing standard lighting with LEDs (and motion-activated LEDs in low-use areas such as fire stairs or meeting rooms) can save tenants thousands a year. Add timers that turn lights off automatically at the end of the day to save even more. It has been estimated that around 40% of energy costs are in lighting; commercial LED lighting can offer energy savings of up to 80% over traditional lighting. And while fluorescent lighting certainly uses less energy than incandescent lighting, the tubes often contain mercury, which is difficult to dispose of safely.

Of course, best of all, and most sustainable, is natural lighting. If you own an older building, then investigate whether or not it’s possible to install skylights or larger windows to introduce more natural light. (On the list of most-desired attributes of workspaces, ‘natural lighting’ is in the top three).

2. Ventilation

Good ventilation has become a key issue, especially in office buildings, since the pandemic. Your goal should be to introduce as much fresh air into your building as possible while ensuring stale air is removed.

3. Insulation

When moving more towards a ‘passive’ building, it’s key that the building is fully insulated to protect against extremes of heat and cold. In older buildings, it’s worth having a tradie inspect all the windows and doors to check for draughts, and seal gaps.

4. Natural materials

Essential for tenant wellbeing, natural materials like sisal, wool, stone and wood lead to better air quality. Products like MDF or nylon carpets use petroleum-based chemicals and formaldehyde in their production, and the gases released after installation can cause headaches or nausea. (There is a proviso here: there are low-formaldehyde MDF products available).

5. Paint choice

Most paints contain VOCs, or ‘volatile organic compounds’ that add to air pollution and reduce air quality. However, there are several low-VOC paints on the market.

Tenant tricks

For tenants, even a simple change like changing a stand-alone water cooler to a product that is plumbed into the mains with a filter will aid sustainability. Delivery trucks that deliver bottled water contribute to emissions, as does the production and filling of the plastic bottles. Best of all, however, is that an integrated water dispenser will cost you much less over the long term.

Installing LED lighting, if it is not already installed, could lead to a great reduction in monthly outgoings. Most states offer subsidies and grants for upgrades to LED lighting. In South Australia, tenants and landlords can take advantage of the Retailer Energy Productivity Scheme (REPS).

How we help commercial building owners to be more sustainable

We work closely with landlords and tenants to create environmental management plans, advise on what tenants want, and help landlords maximise the return on their commercial property investment.

Our sustainability services include:

• Advice on rating systems

Buildings that are certified under one or more of the ratings such as NABERS, (National Australian Built Environment Rating System) or achieve at least a 4.5-star Green Star rating from GBCA, (Green Building Council of Australia) will attract a higher rent. 

• Comprehensive sustainability audits and strategy

We will review your current assets and help you to implement an overall sustainability plan so owners comply with any relevant regulations. 

• Sustainable building and portfolio management 

Our careful attention to your outgoings ensures that any sustainability initiatives are economically viable. It is clear to see from the experience of GPT, a major Australian real estate investment trust, that sustainability can improve revenues. Since 2005, GPT has saved more than $210 million in energy costs alone. 

• Marketing strategies

Our marketing is designed to appeal to prime tenants, using our knowledge of rating tools, regulations and what the market is demanding.

From the data available, we see that investor and occupier demand for sustainable buildings is on the increase. The Australia-Pacific region globally appears to be at the forefront, with 50% of commercial building owners and occupiers noticing an increase. The International Finance Corporation (part of the World Bank) has predicted the rise of green buildings as a major global investment opportunity. And in today’s younger workforce, Millennials and their values are driving change.

Can we help with your Mount Gambier commercial property?

At Herbert Commercial, our expert team can help with everything from achieving sustainability for your building to tenant negotiations and the marketing and sale of your property. 

Call us today on 08 87 250 500 for industry-relevant, professional appraisal services and take advantage of our specialised service in creating and implementing environmental plans.