The Green Wave; Where is it now?

‘Green’ is only a response to working in harmony with our environment, to be more efficient and to benefit from the great things nature provides.

Since early days our buildings were built to protect us from the harsher elements of our environment and to benefit from the good.

From the 1900s onwards we have lived in a push button world where, through the use of cheap energy, we developed the ability to fight nature. This has led to designing out of harmony with natural forces, but at a huge cost for energy and environmental damage. Imagine today building a house for the Australian Outback, the American Prairies or an Indian Palace that could be habitable in extremes without air conditioning and built from local materials. They did back then, because they had to. The Green Wave is starting to address the same efficient designs, but with high technology added in.

The Green Wave as a general movement in the property industry is relatively new and started when Green Building Councils emerged around the world in 2002 and 2003.

Smart designers and consultants quickly hopped on board, knowing that their skills were back in demand; buildings would once again require custom design, as opposed to ‘same as the last one’ design.

The funds and clients took a while longer. Green buildings seemed to be costing more, certainly professional fees were higher. They also had an inertia problem, brought about by the mass of older non-Green property they owned. They were initially unable to see the benefits of investing in the new breed of buildings and wrestled with the concern that they would make some of their older ones look very inefficient. As the systems were refined and accepted as the ‘norm’ it became clear that the bigger and smarter tenants wanted the healthier benefits Green buildings provide; major funds changed almost overnight. The better contractors also changed overnight. At the lowest level it was in the specification, what else could they do? At the higher level the contractors have taken sustainability and spread the philosophy through their businesses and now run sites and use building practices that are better than ever before. They understand Green buildings better than many other sectors of the property industry and are delivering them.

Where are we now? The demand is there, the consultants, designers and the builders are delivering. Now that we have the Greenest buildings, we have new issues and learning curves.

The wave is hitting the property management businesses, already some are up and riding, but others are not aware or looking. Just as the Green change has been the biggest to many building manufacturers and contractors it will be the same to the property managers.

It is incredible that despite all the signs and all the warnings from the Green aware people, so many property managers think it is business as usual.

So where are the risks to Property Managers?

If we call these buildings high efficiency buildings we will start to see what is needed to run them. A good understanding is required of contemporary technology and the way NABERS and Green Star systems work, particularly in regard to the way the rating calculations work.

Green is not a dark art, but it is very complex and cuts across many disciplines and areas of expertise. Rest assured no one person or firm knows it all.

At the moment the risks are found particularly in NABERS Energy and NABERS Water where the building should be rated every year. Green Star is a once off rating where if the building is awarded a rating, it is deemed to have complied with a rating tool that was current at that time for example 4 Star Green Star Office Design v2 2007.

Risks to Property and Asset Managers include:

1. Taking on property management without proper due diligence.

• Is it able to perform to the stated ratings?

2. What are its ratings?

• Is it built to maintain those ratings?
• Is it set up and commissioned to achieve  those ratings?
• Can we maintain the ratings?

3. What are our risks if the ratings slip?

4. Do we have the qualified and experienced staff with the skills to understand and run the building?

5. Has the Landlord made a commitment to the tenants on a particular rating?

6. Is there a Green lease with Green performance commitments?

7. How does the building achieve its rating:

• What are the NABERS and Green Star calculations?

8. Are there any sensitive or risky areas where points (and ratings) could be lost?

9. How easily does it achieve its rating?

10. Does the fee reflect the extra costs that will be incurred in expertise and time?

Where is the Green Wave going next?

The next points of call are the Valuers and the existing buildings.

Valuation is all about market demand and expenditure. They will need to learn the difference between good and not so good Green buildings. They have had to do this with all buildings in the past, but now the new Green movement will cast doubt on how the older ones will endure; whether or not they can be upgraded, if they indeed need to be, to meet the newer measures. They will also need to consider the likely cost of upgrades and its viability.

Another measure that will be introduced in time will be the carbon cost. Not just the cost of carbon in running the building, but the cost of carbon in replacing an older building. It may in fact be that the value of carbon already expended and embodied in the building may far outweigh the carbon that will be produced in demolishing the old and building a new one.

The exercise is going to be very complex and if the Rudd Government led by Penny Wong has its way, carbon will be costed in and you will pay.

By John Goddard from J Goddard & Co
John Goddard can be contacted at john@jgoddardco.com