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Sydney office landlords see value in reaching for the Green Stars

June 11, 2018

An artist's impression of the Circular Quay Tower. Image: Lendlease

Sydney’s next highest office and retail skyscraper, the proposed new 55-level Circular Quay Tower, is intended to stand tall as a beacon of excellence in sustainability.

With the architects and developer Lendlease targeting all the top-rung green markers, the $1.6 billion tower is set to be another feather in the cap of the Green Building Council of Australia (GBCA) and its mission to keep Sydney among the global leaders in environmental excellence.

“I think our six-star buildings represent what we describe as world leadership in built environment and become flagships not just for the developer or for Australia but for showcasing world’s best practice,” said GBCA chief executive Romily Madew.

“We’re seeing an increasing focus from investors, tenants and owners on how buildings are performing in this sphere and over the last two years we’ve seen the area of Green-Star-certified space almost double, and rise 93 per cent from the end of 2015. We now have 37 per cent of office space green-rated.”

That’s a footprint of more than 28.5 million square metres of certified building space and, with the GBCA certifying 304 projects last year alone, the total number of Green Star projects certified since the rating system began in 2003 now stands at 1767.

With a number of older buildings now being renovated or refitted retrospectively to become more energy efficient, the potential for a future increase is huge. It’s also being driven by greater interest from companies in the wellness benefits that high-performing buildings can deliver, in terms of workers’ health and satisfaction and, as a consequence, productivity and good staff retention rates.

An artist's impression of Ruby Place, at Lendlease's Circular Quay Tower. An artist’s impression of Rugby Place, at Lendlease’s Circular Quay Tower.

JLL Australia head of leasing Tim O’Connor has seen a rapid rise in this awareness particularly. “There’s a huge amount of work being done, and emphasis now placed, on wellness within a development,” he said.

“It’s about natural light and fresh air circulating around floors, fitness options and then the quality of the ground plane and retail offerings. Barangaroo is a testament to the effectiveness of creating places where people want to be, and enjoy being, and feel good about it.”

At Commercial Real Estate, the importance of sustainability has lead to a new collaboration with the GBCA, where users of the website commercialrealestate.com.au, who are looking for offices to rent or purchase, will be able to click through from a property listing to a “building profile” to see which buildings have Green Star ratings. These ratings have been added to hundreds of building profiles so far on the website, with many more to come.

“We’ve found that users care a lot about the building, and want to know as much as they can about such things as its energy ratings, the amenities inside and out, and who else is there,” said Dominic White, product manager for Commercial Real Estate.

“Knowing how green, energy-efficient and sustainable it is can be very important. We’ve found people are now really starting to embrace the sustainability of an office.”

The GBCA’s Romily Madew said they were excited about the partnership, which would increase the awareness and value of the Green Star ratings.

“I think it demonstrates the regard with which Green Star is held in the market from both owners’ and tenants’ perspectives,” she said. “Anything that increases the understanding and value of Green Star is beneficial.”

Those kinds of concerns have been front and centre for developers such as Frasers Property Australia for a long time. The company has a commitment to rate all new projects and existing properties with Green Star – 231 in total so far including its iconic One Central Park.

Frasers chief executive Rod Fehring, who also serves as the chair of the GBCA, said Australia had its challenge to move the built environment to zero carbon emissions by 2050.

“The early adopters in this space have been the large tenants at the premium end of the office market who position themselves as leaders in the field and, secondly, who know it produces a commercial benefit,” Mr Fehring said.

“If you are thinking differently about how you heat and cool buildings, how you ventilate, design and orient them and how you manage water and lighting, that all adds up to lower outgoings which becomes consolidated into the value of the asset.”

Andrew Borger, head of office development at Charter Hall, which gained Green Star certification for its entire portfolio in 2017, agrees. “It makes good commercial sense to have sustainable buildings using less energy and water and costing less operationally,” he said. “And we’ve also found our tenants, customers and investors want to leave the world in an improved environmental position.”

Six-star target for Tower

Circular Quay Tower is set to become Sydney's tallest upon completion. Circular Quay Tower is set to become Sydney’s tallest upon completion.

The Circular Quay Tower designed by Foster + Partners and being developed by Lendlease as the centrepiece of the new Circular Quay precinct is targeting a six-star Green Star certification and a five-star NABERs Energy rating.

With demolition and the clearing of the site now under way and construction due to begin in the next few months, there’s an enormous amount of design work to make sure the 263-metre-tall building will be as green as possible when it is finished towards the end of 2021.

“We are looking at the services and infrastructure within the building, the material we use in construction and elements like the quality of air and the water supply,” said the tower’s project director, Kimberley Jackson. “We’re also developing an envelope of the building to then allow tenants the best possible platform to build their own fit-outs for the best environmental outcome.

“We’re making sure we don’t use materials with toxins, we’re combining the glass quality and tinting of windows with the balance of mechanical services for the best energy efficiency and environmental quality.”

The plans for the tower and precinct, a collaboration with the City of Sydney with 55,500 square metres of net lettable space and 5500 expected workers, have so far earned the admiration of the GBCA’s Romily Madew.

“The Circular Quay Tower project will build on Lendlease’s stellar track record delivering both environmental and social sustainability outcomes of the highest order,” she said.

“Workplace wellbeing will be augmented by specific connectivity design features that link key transport hubs and achieve 99 per cent walk and transit scores. Importantly, the project will create a vibrant new civic space in the centre of Sydney, with a public plaza at its heart, demonstrating the essence of world-class placemaking that makes Lendlease a leader in green building.”

So far, prospective tenants are embracing the planned sustainability of the project, in particular the wellness aspects for staff, with advanced discussions ongoing with a potential key tenant.

“The quality of air and light and the most advanced LED technology help to make it a more appealing environment and add wellness,” said Ms Jackson. “The bike hub will encourage exercise and the precinct a sense of the community that people will want to go outdoors and experience.”

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