Sustainable solutions for tenants: the final frontier
Be it a new shopping centre, office building, residential community or any type of newly built form, the expectation to create something sustainable is increasingly becoming embedded. The question that typically follows is: who pays for it?
The building industry has evolved to recognise that creating something sustainable means it must be economically sustainable too. An investment in sustainable initiatives is accompanied by payback expectations over the lifecycle of the project or, ideally, earlier than this.
So the more pertinent question is, from an occupier or tenants’ perspective: why should I care?
This question has been more difficult for developers and owners to answer. If developers are expected to deliver sustainable projects and make them work financially, what impetus is there for tenants to research – or even care – how well the project stacks up from an environmental and social sustainability perspective?
While the creation of a sustainable shopping centre can deliver greener outcomes and futureproof an asset’s value, is it enough to coax a tenant to sign on the dotted line?
Some progressive companies might insist the buildings they lease be sustainably sound but, for most, the thing that resonates loudest is the bottom line.
If a building has the potential to make a difference to its occupiers’ costs, it is perhaps the final frontier to all stakeholders working towards the most sustainable outcomes.
It’s a challenge, and developers can focus on any number of areas in the design and construction process.
At Frasers Property Australia, one area we’re focusing on is energy and, more specifically, rising energy prices.
Embedded energy networks – that combine on-site energy generation distributed among those occupying the site – is one progressive solution. At Ed.Square, in the south-west Sydney suburb of Edmondson Park, we are developing a mixed-use masterplanned community incorporating residential apartments, terraces and townhomes, community amenities and a vibrant neighbourhood shopping centre.
Certified carbon-neutral power will be delivered by a large-scale solar photovoltaic system on the Ed.Square shopping centre roof and on the roofs of the new homes, as well as purchased carbon offsets.
We will buy electricity on behalf of tenants and the shopping centre, so that we can offer tenants a cheaper electricity rate than the published rate of the three biggest electricity retailers in the state.
Efficient plant components will allow us to competitively deliver air-conditioning and hot water. The system involves the installation of a centralised air-conditioning plant, with the electricity used in the plant coming from the solar PV system. Where there’s a shortfall, Frasers Property will purchase carbon-neutral power from the grid.
Hot water will be made in the central plant room, and the heating and cooling produced will be supplied to tenancies. Retailers will be charged for their energy consumption in their tenancy, rather than calculating charges on a pro-rata basis.
We will also provide them with metered data on their consumption of hot water and air-conditioned heating and cooling used in their tenancy. This will allow tenants to monitor and manage their air-conditioning and potable hot water costs.
It’s a progressive solution that, from a sustainability perspective, works on a number of levels.
It helps to futureproof the shopping centre and its occupants against rising energy prices. It harnesses clean energy and distributes it on the site on which it’s produced. From an economic sustainability point of view, it generates a return on the network infrastructure for us.
By incorporating an embedded energy network at Ed.Square, we are taking the long-term, whole of project lifecycle responsibility for energy use on site, giving us a vested interest in ensuring the ongoing smooth operation of the network, not least because we can generate a return.
This in turn allows us to increase our investment in the infrastructure, improving its quality and performance, and translating into better star ratings and greener outcomes over the lifetime of the asset.
CEO Rod Fehring recently wrote in The Australian Financial Review that “distributed energy, feeding into and out of the grid, is the opportunity for solar, wind and geothermal power both as part of a demand management strategy and as a genuine source of new generation capacity.”
It’s also an opportunity for us, as shopping centre owners and developers, to demonstrate and deliver the bottom line benefits of sustainability.