Sustainable Property in Practice Network

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Sustainable Property in Practice Network

• Louise Ellison
• C-SCAIPE
• School of Surveying
• Kingston University
• Westfocus Innovations Day
• 18 May 2006

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• What do we mean by sustainable property?
• Assessing social, environmental and economic
  performance the triple bottom line
• The investor perspective
• The occupier perspective

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Circle of Blame
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Sustainability criteria for commercial property

• Waste and Water
• Occupier
• Pollutants
• Contextual Fit

• Energy efficiency
• Accessibility
• Adaptability
• Climate control

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• Investors perspective
• Property investment building occupier
• Building can be controlled
• Occupier can not
• Require long term return
• Low/manageable risk
• Limited cash outlay

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• Occupier perspective
• Focus on leasehold occupiers
• Limited relationship with fabric of building
• Strong relationship with running costs but little
  incentive to invest in plant and machinery
• Most effective voice through rental negotiation
  at rent review and lease renewal

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• Energy efficiency
• Low energy costs
• This situation is changing and uncertain
• Metering and sub-metering more routine
• Requirement under Part L of the Building
  Regulations
• Energy certification

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• Implications for Occupiers?
• Energy costs rising as a proportion of business
  costs
• More data is available
• Newer buildings should perform better -the stock
  is improving slowly
• Energy certification should bring energy into
  rental negotiation

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• Implications for investors?
• Rising energy costs increase business costs
• Occupier will
• a) look for ways to reduce energy bill
• b) increase resistance to rental increase
• Likely effect will be on rental growth
• Occupiers will not pay more for energy efficiency
• They may pay less for inefficiency

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• Accessibility
• Location is important but within location
  accessibility matters
• No public transport increasingly problematic
• Parking increasingly difficult
• Real fuel costs are rising

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• Implications for occupiers?
• Labour and client issue
• Can your staff get to you?
• Can your clients get to you?
• Travel time commuting is it putting staff
  off/wasting time and productivity?
• Public transport availability
• Rail possibly more effective form of travel

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• Implications for investors?
• Green travel plans expensive for occupiers but
  a planning and CR issue
• Is there a public transport strategy for the
  building?
• Are cycle racks and showers available?
• Property with limited transport options is more
  risky

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• Adaptability
• Accommodating changing working practices
  productivity
• Floor plates
• Daylight penetration
• ME servicing
• Costs of churn
• (BCO Office fit out guide)

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• Implications for occupiers?
• Office occupiers need to re-configure space
• Must be easy to do this
• High worker/space ratios save costs
• Modern working practices improve productivity
• Newer/refurbished space will reflect these
  requirements

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• Implications for investors?
• Office portfolios need to be reviewed
• Unadaptable space may become more difficult to
  let
• M and E may make a building unadaptable
• Refurbishments should reflect these requirements

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• Climate Control
• Climate change may increase the relevance of
  effective climate control
• Vulnerable property
• City centre located
• Retail
• Office

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• Best climate control is effective and
  operationally efficient
• Property with inefficient, ineffective or no
  climate control is
• less attractive to the occupier of the future
• likely to depreciate more rapidly

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• Implications for Occupiers?
• Better use of controls can reduce operational
  costs substantially
• Need to demand better systems and understand them
• Consider whether air condition is necessary
  what are the alternatives?

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• Implications for investors?
• Climate control necessary in some buildings
• Inappropriate climate control will be expensive
• operational energy and carbon emissions
• But also tenant demand
• Retrofitting is very expensive and difficult to
  programme

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• Waste
• Increasing cost of waste disposal
• Recycling important CR target
• EU Waste Electrical And Electronic Equipment
  Directive
• Can a property support this logistically?
• Will it create demand for space?
• Effect on rental value?

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• Implications for Occupiers?
• Waste a major cost issue landfill tax
• WEEED regulations will increase responsibilities
  of electrical manufacturers
• What is the business waste management strategy?
• Does the property support this?

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• Implications for investors?
• Cannot control the occupier
• Does the property support waste management
  strategy?
• Waste storage and collection may reduce net
  lettable area
• Tenants increasingly require facilities

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• Water
• Low on the agenda in terms of cost
• Important CR issue
• Metering and sub-metering becoming standard in
  commercial property
• Property without basic water resource management
  measures will need to fit them or suffer
  depreciation

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• Implications for occupiers?
• Water costs are rising
• Water supply is becoming problematic
• Already a CR reporting issue
• Occupiers increasingly demand water management
  features

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• Implications for investors?
• Not all occupiers will be concerned
• High-end prime space MUST support water
  management strategies
• Landscaping and roof gardens will become a
  liability if water-hungry
• Incorporate water management features at next
  retrofit

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• Initiatives at KU
• Future-proofing property questionnaire
• Sustainable Property Appraisal
• Monitoring sustainable property investment
  performance
• C-SCAIPE ensuring KU graduates understand
  sustainability from a variety of professional
  perspectives