Blog - Commercial

29 September 2016


The Australian property industry has recently had an appetite for innovation. This doesn’t just mean utilising the latest technology. It means new ways of approaching solutions and new ways of dealing with very old and original challenges such as environmental sustainability. Consequently, we’ve seen the rise of smarter and greener buildings.

So what is a green building? A green building refers to the physical structure as well as processes that are both environmentally responsible and resource-efficient, which are implemented throughout a building’s lifespan. This covers everything from a building’s design, construction, operation, maintenance and renovation through to demolition. One way in which Australia has encouraged ‘greener buildings’ is by introducing a National Australian Built Environment Rating System (NABERS), that measures the energy efficiency, water usage, waste management and indoor environment quality of a building and its impact on the environment as a whole.

Many people view delivering an environmental boost to society, as well as maximising shareholder value or profits, as two competing objectives. More so, many pass on the baton of environmental responsibility to the government as a greater social concern and essential public service. However, we’ll explore why it makes good business sense for building owners to ensure their buildings are green ones and why it’s important for tenants to factor in a building’s green status when choosing space for their business.


Ideally, a green building has a NABERS rating of 4 or above. More importantly, the building owner should be committed to measuring and tracking energy and water use and waste reduction. All materials in the building should have been sourced from manufacturers who have third-party environmental certification. The building owner should also consider including clauses that improve the environmental performance of the building and occupied spaces.

For tenants, the building should be close to public transport, have access to fresh air and natural daylight with workers located no further than 10 metres from a natural light source. The fit-out should have been constructed with low use of toxic materials, including paints, adhesives, carpet and joinery. Your tenancy should preferably be zoned so that lighting in unoccupied areas (such as meeting rooms) can be switched off when not in use.


Nowadays, most people have a healthy environmental conscience which means businesses can use their building’s green status to attract and retain staff.  For example, end of trip facilities such as showers and bike racks can be a key deciding factor in where employees want to work. Let’s be honest, most of us spend a large chunk of our week in the office so want to feel comfortable in our working environment.

A happy staff member


For tenants, research has shown that staff who work in a building that reduces waste and are fitted out to increases productivity and promote staff wellness (such as the inclusion of break-out / meditation rooms and efficient IT technologies) are more likely to be proactive and happy employees. Cityswitch, have estimated that staff costs in office-based businesses can account for as much as 90 per cent of a company’s total expenditure! Which means if companies can achieve a positive uplift in productivity, the financial benefits are significant. For example, one of Macquarie Bank’s Sydney premises, located at 1 Shelley Street, recorded a 15 per cent productivity uplift after just one group of employees moved into their new 6-star rated office.

More so, a building owner’s commitment to addressing their building’s inefficient IT and electrical equipment, which can be one of the main culprits that add to a building’s carbon footprint, can see a significant financial and environmental saving.


More and more building owners are now making upgrades to improve their Green Star ratings to attract new buyers and tenants alike. The Better Returns report carried out by the Australian Property Institute showed that Green-certified buildings can decrease outgoings by 1.5 per cent while increasing rental values by as much as 5 per cent and sales values by nearly 12 per cent. For buyers looking for a longer term investment, buying into a green building means that your asset is future proofed and will have ongoing appeal to environmentally conscious buyers and tenants.


Waste reduction is of a growing concern for building owners. One of the principal driving forces behind this is the realisation that it is a commercial issue; the less waste that is created, the less you have to pay for its by-product and/or waste removal. Thus ensuring your building is a green one that reduces the amount of waste produced will help promote monetary savings.

A forward-thinking Queensland council has recently committed to waste removal and
unveiled plans for an automated, underground waste collection system which is set to eliminate wheelie bins, noisy garbage trucks, vermin and odours. The waste of Maroochydore City Centre will be transported through a 6.5km system of underground vacuum pipes, from commercial buildings and apartments at speeds of up to 70km/h.

A green building in the middle of the city


We will most likely see a continued increase of new green office developments and refurbishments in premium office markets around the country, especially with a heightened concern for staff health and wellbeing. However, the mid-tier office market is yet to see any notable shifts in energy and emission reduction. Nationally, these B-grade spaces make up an estimated 52 million square metres of the 64 million square metres of office space!

There are still complex barriers affecting the adoption of energy efficient measures, notably the lack of knowledge, capital, resources and time faced by building owners and property managers. To help address this, the NSW Office of Environmental and Heritage has recently initiated the ‘No more average buildings’ programs which provide financial assistance for energy-efficient improvements in buildings with low NABERS energy ratings.

All in all, the benefits of a green office building include substantial cost savings in utility bills and lower vacancy rates for building owners. For tenants, studies have shown that green office buildings help to create an environment that is both functional, collaborative and comfortable, bolsters employee’s productivity which in turn helps boost the bottom line.

Not quite there yet? Try these 20 simple tips to reduce your company’s carbon footprint.



Date: 29 September 2016 Author: TGC Writer
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About the author:

TGC Writer

TGC is the largest privately owned commercial real estate agency in the Sydney CBD, with over 20 years experience servicing the CBD, City Fringe and greater Metropolitan property market. We’re committed to assisting you with your total property needs, including buying, selling, leasing and property management.

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