Sustainability in the Educational Sector

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Sustainability in the Educational Sector

• Stuart Morley
• Partner Head of Research
• 21st November 2007

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Discussion Outline

• Property and Sustainability
• Occupier attitudes
• Drivers of change - Legislation, Directives
  Policy
• Standards Costs
• Asset value implications
• Conclusions

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Property and Sustainability
4
Property and Sustainability
Sustainable Development.
5
CO2 Emissions
6
CO2 Emissions - Total Picture
7
Occupiers views
8
Accommodation Strategy - importance of green
issues
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Perceived benefits of Environmentally Efficient
Property
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Students views of Universities Colleges

• Large student expansion
• Students more aware of sustainability issues
• Students who pay more will expect more
• UCAS report, January 2007
• 45 of applicants intending to study education,
  social sciences, architecture, building or
  planning say a good track record on sustainable
  development was important in choosing where to
  study

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Importance of green office features in a new
building
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Drivers of change - Legislation, Directives
Policy
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Drivers of Change - Carrots

• Reduced expenditure on utilities in efficient
  buildings
• Climate of rising energy costs therefore
  quantifiable financial benefits
• Enhanced Capital Allowances on efficient plant
  and machinery
• Grants
• Corporate Social Responsibility (CSR)
• Market demand for good environmental credentials
• Benchmarking tools, e.g BREEAM
• Employee/student Satisfaction, Staff Productivity
• Unquantifiable, but potentially large financial
  benefits
• Reduced sick leave

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Drivers of Change - Sticks

• European Directives
• Energy Performance of Buildings Directive (EPBD)
• Part L Regulations and Energy Performance
  Certificates
• Carbon Emissions Trading
• Landfill Directive Tax
• Central, Regional Local Government Policy
• PPS 1 Sustainability emphasised at core of
  planning
• PPS 22 Renewables and on-site energy generation
• PPS 26 Draft Climate Change Bill (March 2007)
• RDA Checklist

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Energy Performance Certificates

• EPCs cover construction, refurbishment, sale or
  rent of commercial buildings for 10 years
• 6 April 2008 all buildings over 10,000 sqm
• 1 July 2008 all buildings over 2,500 sqm
• 1 Oct 2008 all remaining buildings
• 6 April 2008 - Display Energy Certificates
  (annually) for all public buildings (publicly
  owned visited by public) of greater than 1,000
  sqm

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Energy Performance Certificates (EPCs)
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Display Energy Certificates
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Standards Costs
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BREEAM Assessment

• BREEAM takes into account many sustainability
  indicators
• Energy efficiency
• water consumption
• transport
• land use and ecology
• pollution (greenhouse gas emissions)
• management
• health wellbeing
• materials

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HEEPI - Buildings Best Practice

• Maximise energy efficiency, maximise user health,
  satisfaction productivity, and minimum whole
  life cost
• Well insulated, air tight structure
• Efficient, responsive heating and controls
• Appropriate glazing and shading
• Controlled ventilation
• Energy efficient lighting and appliances
• Passive or energy efficient cooling
• Efficient water heating
• User involvement during design, committed and
  knowledgeable during use
• Passive solar design, with renewable energy
  incorporated

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HEEPI Best Practice

• BREEAM assessment recommended (Northumbria
  University City Campus East BREEAM Excellent)
• Recycling materials not mentioned
• Water (rain water harvesting) not mentioned
• Waste not mentioned
• Preserve enhance biodiversity not mentioned
• Green travel plans not mentioned

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Results for Typical location
Source BRE
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Whole Life Costing

• Is a long term consideration of ALL costs and
  revenues associated with an asset.
• Hypothetical example Types of heating systems in
  an office building
• Reduced running costs with CHP system, long term
  financial rewards

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Grants

• Low or zero carbon technologies in low carbon
  developments
• solar photo-voltaics
• solar thermal hot water
• wind turbines
• ground force heat pumps
• wood fuelled boilers
• Developers and businesses eligible
• large organisations up to 40 of total
  installation
• SMEs up to 50 of total installation
• 100,000 max for small projects (under 1,000 sqm)
• 1,000,000 max for large projects

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Asset Value Implications
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Investment benefits of Sustainability

• Tenant retention better
• Shorter void period between leases
• Higher rents than in less sustainable buildings,
  so stronger rental growth
• Reduced rate of depreciation
• More liquidity, ie quicker to sell

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Importance of Sustainability Issues for
Investment Purchases
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Importance of high BREEAM Rating for Investment
Purchase
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Will EPCs have a major impact on the Investment
Market
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Conclusions

• Occupiers showing increasing demand for
  Environmentally efficient / sustainable buildings
• Demand for sustainable buildings will increase
  with more stringent legislation
• Introduction of EPCs (and sustainability issues)
  will have implications for building values
• Evidence emerging on sustainable buildings
• Higher income and values
• build costs acceptable