Green - the new gold. How leading developers are mandating green buildings

Green - the new gold. How leading developers are mandating green buildings

Green buildings and the benefits they provide are back in the spotlight. It’s been 10 years since the New Zealand Green Building Council (NZGBC) introduced green building ratings to the commercial property market. While it’s been a bumpy ride over the past decade, incorporating sustainability and energy efficiency into commercial building development is now standard business practice.

The movement to greener buildings was just beginning to gather a head of steam in New Zealand in the mid-2000s when the Global Financial Crisis pricked its bubble.

With the corporate sector under the pump for perceived “excesses” of the past, occupying a flash looking building – no matter how environmentally friendly and energy efficient – was not necessarily seen as a good thing in more chastened and challenging times. Moving to newer and better premises slipped off most company agendas.

Perhaps an even greater upheaval followed in the wake of the Christchurch earthquakes. Suddenly a building’s seismic rating, previously of little consequence to anyone outside of Wellington, rocketed to the top of tenants’ check lists and became the most important consideration when looking at accommodation options.

However, with well entrenched seismic assessment systems and a much improved economy now in place, green buildings with lower running costs, healthier staff environments and smaller environmental footprints are back in the spotlight.

Lloyd Budd, Bayleys’ director commercial, retail and operations, says a 5 Green Star rating, signifying ‘New Zealand excellence’, is now the norm for most new large office buildings and for some state-of-the-art warehouse and commercial buildings. The latest building to receive a 5 Green Star is Bayleys House at 30 Gaunt Street, Auckland part of Goodman Group’s VXV office precinct at the gateway to the Wynyard Quarter. The Jasmax designed six-level building, which Bayleys’ head office and central Auckland staff will be located in, includes a range of sustainability features such as a high-performance double-glazed façade to maximise natural light and balance thermal comfort; a detailed energy monitoring system; rainwater storage; LED office lighting; and low-flow water fittings.

In 2007 the newly established NZGBC introduced Green Star as an independent rating tool for commercial buildings, in consultation with the property industry, out of a growing desire to build more efficient buildings with a reduced environmental impact.

Geoff Wicks, now a project leader at Beca, led the pre-construction and design teams on one of the first two buildings to achieve a Green Star rating, an office complex at 80 Queen Street in Auckland’s CBD still occupied by Deloitte and BNZ.

He says some of the features the building incorporated back then such as low-flow water fittings and indoor air-quality monitoring are now fairly standard in current design and construction practice, whether a building is green rated or not.

“It’s just what we do now. The construction ‘cost premium’ for a green building back in the mid-2000s has all but disappeared, as all designs now incorporate environmental features. Operationally these buildings are more cost effective and that makes good business sense, as well as having a reduced impact on the environment.”

NZGBC now administers three rating tools which have made significant progress:
• Green Star: 133 buildings now have a Green Star design and/or built rating, encompassing 734,000m2 of new and refurbished commercial and industrial buildings, schools and other projects.
• NABERSNZ has rated the energy performance of more than 522,580m2 of office space, encompassing 53 buildings, leading to greater efficiencies and cost savings.
• Homestar, the residential rating tool for warmth, efficiency and sustainability, has 6400 registrations on its books, a 10-fold increase from mid-2015 and is being used by many substantial residential developers. A 6 Homestar rating or above will have better thermal performance and moisture control than a new home built to Building Code, as well as lower operating costs. Three homes have reached a perfect 10 score.

In New Zealand, the adoption of green building standards has been market led – hence the reason why it lost some impetus following the GFC – rather than regulation driven as in some European countries and the UK. And the market is responding as evidenced by the country’s most active developers of larger office complexes in recent years, such as Mansons TCLM, Precinct Properties and Goodman Group, providing a Green Star rating as a standard feature of tenant packages.

“There’s a perception that green buildings are more expensive but that’s no longer true and they are now essentially best practice for delivery of office accommodation,” says Mansons TCLM director Culum Manson. “They provide companies’ consultants and facilities management teams with the tools to reduce waste and increase operational efficiency. Also, we are seeing a wider global corporate requirement from offshore owned businesses to comply with a sustainability standard, which the NZBC rating system delivers.”

Fellow director Luke Manson says overseas investors are also increasingly demanding that buildings they purchase are Green Star certified. “Green Star ratings measure the environmental benefits of the design or building and allow investors and building occupants to demonstrate corporate responsibility in a tangible way.”

An increasing number of organisations are also using green-rated workplaces to secure competitive advantage, says Budd, and to attract and retain staff as competition for talented employees heats up again. “Creating a great, healthy and environmentally responsible working environment – and saving money on energy usage, too. It’s a no brainer,” he says. But it’s good for the brain according to research from the Harvard School of Public Health. It found workers in certified green buildings perform 26 percent better on cognitive function tests than workers in non-certified buildings.

Jasmax sustainability officer Jerome Partington says savings on energy and water are fairly easy to achieve. “Actually creating a healthy environment for building users pays way bigger dividends than saving a bit of energy. There’s also the issue of aesthetics – beautifully designed and healthy buildings are appreciated and better cared for.”

Partington reckons New Zealand offers an ideal climate for green buildings with a bountiful solar supply and moderate temperature swings. “If you understand the climate, work with it and spend wisely, then it will give you great results for no extra money. I don’t think people are really cognisant of how easy it is to deliver high performance buildings in this country.”

NZGBC’s chief executive Andrew Eagles says the advent of Green Star has contributed to some key changes in the building and construction industry over the past 10 years.

“We’ve noticed a shift in the materials industry, in particular in timber and carpet – it’s now far easier to find products that have a certified eco-label and low-VOC [Volatile Organic Compound] options to contribute to a healthier indoor environment. That shift was already occurring, but when Green Star project teams began requesting certified products, it helped encourage demand.

“We’ve also seen a growth in projects that combine active and passive design strategies. Sophisticated building management systems help owners and tenants monitor their mechanical services and reduce energy use. Passive design maximises daylight and natural ventilation to reduce heating and cooling costs, and also includes indoor greenery to contribute to a healthier, more productive environment.”

Though a 5 Green Star rating and ongoing NABERSNZ (see separate story) ratings are now standard in Auckland’s CBD and in Christchurch as part of the post-earthquakes rebuild, Eagles says there’s still plenty of opportunity to utilise them for a wider range of buildings and in the regions.

NZGBC is currently developing a suite of lower-cost, simpler rating tools with a more wide-reaching scope. Eagles says NZGBC expects to announce details on these in the first half of this year.

He says exemplar buildings are constantly setting new benchmarks, and the visionaries behind them are influencing the rest of the industry. “The construction sector is enjoying a boom at the moment. It’s exciting that so many companies are working with us to ensure the buildings and homes they’re delivering and managing will create a legacy of quality, productive places for New Zealanders for years to come. The benchmarks for building performance will continue to rise and those who are not planning to meet them risk losing market edge.”

Reducing operating costs – better quality buildings.

A more recent addition to the environmental measurement tools administered by the New Zealand Green Building Council (NZBC) is the National Australian-Built Rating System New Zealand (NABERSNZ).

NABERSNZ is being used to measure and reduce energy use year on year, says NZGBC chief executive Andrew Eagles. Meters are installed to gauge energy output across a range of core services and spaces. The scheme employs a rating scale of one to six stars.

Eagles says building owners are using the rating system to improve building performance, one of the main appeals for blue-chip tenants and investors. An Australian study found a building with a five-star NABERS rating attracted a rent premium of between 4% and 21%. Buildings with a good NABERS rating also have better occupancy rates and tend to have longer lease terms.

Saatyesh Bhana, asset manager for Argosy Property Limited, says, “NABERSNZ is a useful tool for us to understand how energy is used in the building and to be able to improve the building’s performance. By using this information, the property manager can focus their energy-management strategy to make operational improvements and reduce energy consumption. After the Te Puni Kokiri upgrade, the management team saved the occupier $80,000 per year and also reduced their carbon footprint.”

The payback from the low cost Government backed tool ($1000 per building) is emphatic. Auckland’s Zurich House has improved its energy performance by a massive 45% over the last three years.Constructed in 1975, the 17-storey office building, located at 21 Queen Street in Auckland’s CBD underwent a significant renovation in 2008 and is the first refurbished building in New Zealand to attain a 5 Green Star Design and Built rating. It has also recently achieved a 4 star NABERSNZ ‘excellent’ base building rating for energy performance.

Owner Precinct Properties instigated the use NABERSNZ at Zurich House in 2013 to test its energy efficiency. “It achieved only 1 star for its first rating which was a poor result but it provided us with insight about what could be improved and fine-tuned,” says Precinct Properties operations manager Paul Singleton. “It helped us better understand the building.”

A raft of initiatives were implemented to boost energy performance including automated switch off at weekends and public holidays, a review of Zurich House’s mechanical commissioning and an overhaul of its building management services to enhance the functioning of lighting, plant and equipment.

In early 2015 Zurich House achieved a 3.5 star NABERSNZ base building rating and progressed to a 4 star rating last year.

“It’s a very good result and we will continue to build on it,” says Singleton. “NABERSNZ has helped drive building improvements and provided ongoing targets to work towards each subsequent year.”

Norman Disney & Young consultant engineer Ben Bentley – a qualified assessor who certified Zurich House in 2015 and 2016 - says a first NABERSNZ rating is the beginning of the journey. “It’s a bit like developing and testing a car. The initial design of a building is based on theoretical conditions but once it’s put to work the real development and tuning begins. Modern buildings are complex, dynamic systems which require ongoing evaluation and adjustment in order to deliver their best. That is where NABERSNZ is so useful. It tests how a building is operating and helps deliver quality and lower operating costs for the owners.