One client trend TRS’s tenant representatives have noted is an interest in, and preference for, space in sustainable office buildings.
Some companies need to be mindful of their corporate ESG (environmental, social and governance) policies, while others are keen to save on energy costs and provide a more attractive office environment for workers.
Why go green?
Leasing space in a green building can provide tenants with several advantages, such as reduced utility costs, improved employee health, and increased productivity.
Additionally, some tenants may want to demonstrate their corporate social and environmental responsibility to investors, clients and customers by leasing green space. Although enhancing reputation benefits may be difficult to measure compared to utility cost savings, they may be equally important or even more significant.
If you’re thinking about relocating to environmentally-friendly office space, here are a handful of things to consider.
1. Environmental ratings
The Australian property market has 2 benchmarks to reflect a building’s green credentials:
NABERS
NABERS (National Australian Built Environment Rating System) is a performance-based rating system that measures and benchmarks the environmental performance of buildings. It assesses a building’s energy efficiency, water usage, waste management, indoor environment quality, and greenhouse gas emissions. NABERS ratings provide tenants with a clear understanding of a building’s environmental performance.
In Australia, 12% of approximately 4,100 office buildings greater than 1,000 sqm have a NABERS rating of 5 stars (excellent) or better.
Green Star
Green Star is a sustainability rating system for buildings developed by the Green Building Council of Australia. It measures the environmental performance of buildings across 9 categories including energy and greenhouse gas emissions, water usage, materials and resources, and indoor environment quality.
Melbourne has the largest number of green buildings in any Australian capital city with 138 Green Star-rated buildings.
Check before signing the lease
Before signing any office lease, check its green credentials. Ask the leasing agent for the NABERS and Green Star rating.
2. Green office fit-outs
When planning an office fit-out, you may consider an eco-friendly option. Green fit outs refer to the use of sustainable materials, energy-efficient lighting, and eco-friendly practices in the design and construction of office spaces.
The goal is to minimise the environmental impact of the fit-out and create healthier and more productive workspaces. This can involve the use of materials made from recycled or renewable sources, reducing water and energy consumption, and improving indoor air quality.
3. Green leases
A green lease is an agreement between landlord and tenant which aims to ensure that the ongoing use and operation of the building minimises environmental impacts. It provides a framework under which the landlord and tenant can achieve and maintain energy efficiency and other sustainability goals throughout the term of the lease.
There is no set format for a green lease. They are usually drafted after a collaborative process between landlord and tenant. They may cover such topics as water and energy conservation targets and methods, the use of green energy sources, the use of environmentally-friendly products and maintenance of indoor air quality standards.
Some landlords include in their green leases a clause requiring the tenant to undertake a green fit-out, including Green Star certification. This can come at significant cost to tenants, who may baulk at the added expense and effort.
4. Space planning
Arguably the most important factor in office sustainability is the amount of space leased. If a company has more space than needed, it can be a waste of energy to air condition and light the excess space – not to mention an unnecessary expense. So, it’s important to ensure you use office space in the most effective and efficient way possible.
Now that hybrid working is more common, careful office space planning is more important than ever. Greater sustainability gains can be made when office footprints are reduced, and staff aren’t commuting to work every day.
5. Cost concerns
Because they are in high demand, highly sustainable buildings can have relatively higher rents – or what is called in the industry a “green premium”. So, companies must balance their desire to do the right thing for the environment with their office space budget.
How to find a green office building
The best way to find sustainable office space options is to engage an independent tenant representative such as TRS. With our experience and industry contacts, we are best placed to find you a space with appropriate sustainability credentials. Contact us to discuss your needs
