This case study features Investa Property Group – the largest listed owner of commercial property in Australia and the first Australian property fund manager to receive Sustainable Responsible Investment (SRI) certification for its two principal funds.
Contents
Summary
Investa Property Group is the largest listed owner of commercial property in Australia. It is also a leader in sustainability with the following achievements:
- the first Australian property fund manager to receive Sustainable Responsible Investment (SRI) certification for its two principal funds
- over the past 3 years across it's commercial property portfolio, Investa has reduced water consumption by 28 percent, electricity by 14 percent and gas by 37 as well as diverting more than 50 percent of our tenants' office waste from landfill to recycling
The following interview with Craig Roussac (General Manager, Sustainability, Safety & Environment Investa Property Group) explores their motivations and lessons so far.
Motivations and lessons
Interview with Craig Roussac (General Manager, Sustainability, Safety & Environment Investa Property Group)
1 June 2007
What are the main reasons why your company chose to develop a sustainable portfolio?
The first reason was cost savings but I've got to question the word sustainable. If the proposition in the question is that we've achieved 'sustainability' then I think we've still got a fair way to go. So the first reason is cost savings, reducing energy, water and waste and all have direct savings.
Better performing buildings are easier to lease. The question is whether it increases the rent, but we see lower vacancy and shorter let up rates which are important.
Risk management and reducing exposure to higher energy prices and future carbon signals and further constraints such as water. For example, it's helped us position for water restrictions in Brisbane and avoid any punitive measures for not meeting water targets.
What are the best things that have come out of doing a sustainable portfolio?
Firstly it helps us develop and improve the standard of our management more generally. It focuses on efficiency and the management skills for sustainability apply to management more generally.
It has improved our reputation. One of the reason people know Investa exists is its sustainability profile. Property portfolios don't usually have a high profile.
Alignment of employment motivations, strengthening employee alignment with company goals led to greater employee motivation.
What are the things that you did that made the portfolio work well?
Putting in sub metering systems is very effective. We also have a utilities database which we use to process all our facilities invoices and an auditable database for managing facilities. This provides detail for reporting and managing.
Initiatives generally, we've found we've got good returns on capital and those have been enhanced by the management systems we've got in place.
Developed a strategy to optimise - we operate our buildings like we would operate vehicles, we manage and maintain to enhance performance.
What were the things that didn't work quite so well and how were they managed?
I think it's true that we've struggled with our engagement with tenants
Tenants have a huge role. On one level it's been very effective, they've been very keen on our programs, but we don't know if we've been that successful in getting their participation. To address this we've focussed on education and one of the initiatives is the Investa Greenhouse Guarantee which can be found on our website
. It aims to take all the complexity and risk out for tenants who want to be more energy efficient.
Another is the Green Lease Guide, back to the point about engagement; we created a guide to show why these initiatives are in the tenant's interest. It shows the benefits and provides education and mentoring, not just for tenants but for our competitors too frankly. We don't operate in isolation and the more widespread this approach becomes, the more effective our programs will be.
Other information and resources
Investa Property Group http://www.investa.com.au/Sustainability/
Sustainability: Adding Value to Investa Property Group
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