NABERSNZ is a tool to measure the energy efficiency of a building by taking into account its size, number of occupiers and the amount of energy it uses. As you’d suspect, there is a little more to it than this but it sums up the fundamentals. Initially the tool will only be available for commercial offices and comes in three convenient sizes: Tenancy, Base Building or Whole Building ratings. Assessments will be conducted by trained (accredited) NABERSNZ assessors and certification will award a star rating between one and six in half increments. The scheme is voluntary and administered by NZ Green Building Council on behalf of EECA.
So as a voluntary scheme, is NABERSNZ just a ‘nice to have’? Nothing you or your client need concern yourselves too much with? Handily, we have a10-year trial by our Australian cousins to refer to. Their scheme was also introduced on a voluntary basis. By the time the Building Energy Efficiency Disclosure Act 2010 made this compulsory at transaction stage, uptake was already around 60% (by floor area). So what can we learn from across the ditch?
On the first anniversary of compulsory use of NABERS, the Australian press was reporting on research confirming a clear tenant preference for Green Star and high NABERS rated buildings, with the effect that rents and capital values of green buildings had been pushed up. Higher NABERS rated buildings were found to consistently outperform low rated buildings across key office markets in terms of returns and capital growth1.
Closer to home, the latest New Zealand Green Property Index continues to show Green Star rated assets outperforming non-rated buildings: Annualised returns for $1.3 billion of office buildings show total returns for Green Star rated buildings to be 1.8% higher than non-rated buildings2. At a recent Property Council presentation, IPD confirmed that they expect NABERSNZ to have the same impact as its Australian sire.
With governments and major brands placing sustainability at the heart of their social responsibility policies, this is already influencing the New Zealand commercial property market. A two-tier pattern is emerging, with rent levels expected to remain a key factor in low-grade properties but verified sustainability being expected at the premium end. We anticipate that government, seeking to reduce operating costs, will increasingly look to occupy sustainable and energy efficient buildings, which may extend this expectation to mid-grade properties.
Although recent events have focussed attention sharply on seismic risk, itself a matter of sustainability, looking beyond this, the evidence suggests that other aspects of sustainability will be an increasing part of a property’s risk profile. More sustainable properties are simply better placed to serve the needs of the future based on a current (and well established) trend. The expectations are that there will be a switch from the current premium for green buildings to a negative premium (or de-valuing) of assets that perform poorly in this regard. NABERSNZ brings the possibility of measuring the energy efficiency of any existing office building, providing transparency on a key element of sustainable performance.
Our advice to would-be investors in commercial property is that sustainability should be on their radar: Whatever their thoughts on current importance, there is little doubt that this will affect property investments in the medium to long term. Sustainability or at least energy efficiency should form part of the normal due diligence undertaken at pre-acquisition stage. The easiest way by far to get the answer your client needs is to ask the vendor for the Green Star or NABERSNZ rating for the building.
 Hopkins, P; Pays to have good NABERS, The Canberra Times, 01/09/2012
2 New Zealand Green Property Index – Index Snapshot, IPD, March 2013
Michael Gray is a chartered building surveyor and energy assessor at Prendos with over 14 years experience in commercial property. “For commercial buildings, being sustainable means de-risking an asset with lower running costs, increased tenant demand and higher rents and capital values. NABERSNZ is a powerful tool to benchmark the energy efficiency of office buildings and I expect this to become a game changer in the commercial property sector. I look forward to providing strategic and technical advice and managing improvement works to help even more clients maximise the value of their assets and create productive, sustainable workplaces with NABERSNZ setting new standards.”