As sustainability remains firmly on the agenda for commercial real estate investors and occupiers, Australia is leading the charge for Asia Pacific, but has a way to go before matching global markets including Europe, the UK and the U.S.
The focus on sustainability in Australia’s commercial real estate sector has grown rapidly in recent years. Investors now count cost-savings, performance and productivity, for their buildings and their people, as benefits. Sustainability is also a hot topic for investors due to its ability to help mitigate physical and reputational threats that climate change poses, with some of the country’s biggest real estate groups having developed ‘climate adaptation plans’ for their portfolios.
That’s according to green building experts from JLL, who say Australia is leading the region particularly well with respect to one of the key issues in the sector – carbon neutrality. “There are a number of examples of Australian property companies who are leading change,” says Simone Concha, Sustainability Director for the firm’s Australian operations. “AMP Capital aims to be carbon neutral by 2030, Mirvac wants to be carbon positive by 2030, and Investa’s target is to be carbon neutral by 2040. As some of the biggest commercial real estate investors in the country, these efforts will have a long-term impact on reducing Australia’s carbon emissions.”
Australia is also a leading light for health and wellbeing at the top end of the industry, with a focus on buildings that promote employee wellness and connections to nature, but lags other jurisdictions in key areas that many of the country’s investors are grappling with, Concha says.
“Europe is more advanced in social value and carbon lifecycle assessments, and is further down the path in terms of the uptake of renewable energy. Meanwhile, the U.S. leads Australia in signing agreements for offsite power purchasing for renewables.”
Concha says that while Australia is not as advanced at the moment, these are all issues that many Australian businesses are actively exploring. And with the release of JLL’s latest Global Sustainability Report, which assess the firm’s achievements in the sector, JLL Australia hopes to apply lessons learned from its colleagues overseas to the local market for the firm and its clients.
Globally, JLL has made impressive strides to improve its own sustainability and responsibility credentials and those of its clients. According to the Global Sustainability report, JLL estimates it averted 465,000 tons of CO2 emissions over 2016 by advising on renewable energy projects. In addition, it saved clients US$59 million in project savings through energy efficiency, an improvement on the US$47 million posted in 2014.
“It’s also important for us to collaborate with other leaders in our industry, to help create positive change.” Concha adds that JLL is also working within the industry to develop initiatives such as aggregated corporate power purchase agreements and smart, green leasing standards. “Sustainability can be the glue that binds together the real estate market. One sustainability topic, such as resilience or carbon neutrality can be relevant to hotels, shopping centres, office buildings and industrial,” she says.