Green Commercial Property

Frog Green WorldAn efficient and sustainable commercial property has many benefits for the business, including reduced operating costs and better staff and public perception.

How better buildings can help you do better business

  • Government regulations at all levels are increasing in the area of environmental responsibility and that includes building regulations for both commercial and residential. Owning and/or operating from an efficient sustainable building delivers both environmental and operating cost benefits. The energy efficiency of a commercial building over 2000sqm must be declared at the point of sale or lease so that the perspective buyer/tenant gets an understanding of what it may cost to run. This scheme is soon to be expanded to other property types in Australia.
  • Better public relations – sadly not everyone cares about environmental issues, but more consumers are paying attention to the sustainability of businesses and how they operate.  Social media has become a key tool in consumers spreading the word about a company’s environmental responsibility, or lack of it!  Just look at the grief Apple is currently going through for its alleged human rights issues and ‘brown’ energy sources.  If good public image and relations are something a company is after, then being environmentally aware and public about what they are doing about it is becoming a necessity.
  • Attracting employees is another area.  Employees are becoming reluctant to be associated with companies with poor environmental records. Most want to be associated with a company that takes its environmental and social responsibilities as seriously as it does its economic concerns.  Being environmentally aware and managing the issues can help to attract the best talent.
  • Companies that ‘walk the talk’ on sustainability by providing proof of their commitment (e.g. making their policies publically available) and operating from buildings that compliment sustainable practices are considered to be keeping up with the times and generally have an edge over those that don’t. This also helps to promote brand loyalty.
  • Encourages brand loyalty – through publically displaying environmental credentials that demonstrate a company’s commitment.  This has been shown to give consumers confidence in a company and its products.
  • Investors are now tending to prefer environmentally responsible buildings and companies to invest in.  The perception is that an environmentally conscious property or company is one that is more innovative and therefore more competitive.
  • Reduced operating costs are a key benefit for the owner or tenant and not just in energy and water resource usage.  Studies have shown that environmentally sensitive work environments have a significant positive impact on the health and productivity of staff.  One of many case studies found supporting this referred to a Collins Street retrofit in Melbourne where the number of sick days of staff reduced by 40% after the environmental refit was completed. That’s a major bonus for any company.
  • Asset protection and risk reduction.  Buildings incorporating energy efficiencies and sustainable attributes have been shown to attract a ‘green premium’ in market value and rental yields over their traditional peers.  For example, in Europe ‘green’ buildings are attracting a 7.5% higher market price and in the USA up to 10% higher market price.  Here in Australia, an IPD Green Property Index report found a clear benefit for owning/operating a ‘green’ building.  On top of that, a recent Low Carbon Australia study has demonstrated that market prices for ‘green’ commercial buildings attract a premium of up to 9% in Australia, with up to 3% higher rental yields.   The Royal Institute of Chartered Surveyors have also reviewed their valuation methods to include sustainability features.