Constructing comfortable, quiet, healthy residential apartments with lower operating costs might sound expensive, but there’s growing evidence that it makes good business sense.
The Clean Energy Finance Corporation (CEFC) is working with major developers to address the Australian economy’s energy and emissions challenges—and in the process is demonstrating the case for increasing sustainability in the property sector.
According to the Property Council of Australia and the Green Building Council of Australia, buildings use more than 50 per cent of Australia’s electricity and produce almost a quarter of all carbon emissions.
The good news is that technology already exists that can dramatically reduce those figures, while simultaneously reducing residential energy costs, creating comfortable homes, and potentially increasing valuations.
Demand for more sustainable living is growing among consumers, with CSIRO research indicating that two thirds of home buyers prefer energy-efficient homes when given a choice.
Meanwhile, University of Wollongong research shows that homes with energy-saving features (reaching a 7-star rating) could be selling for up to 10 per cent more than those without (with a 3-star rating).
Setting sustainability expectations
The CEFC recognises that building sustainably is likely to be increasingly attractive to apartment developers, who are also long-term owners and managers of residential property.
So in an Australian first, the CEFC invested $63 million in the nation’s first institutional build-to-rent investment platform—Mirvac’s Australian Build-to-Rent Club.
With this investment, the CEFC is working with Mirvac with the shared goal of achieving a higher level of sustainability in its build-to-rent club buildings.
The $200 million, 315-apartment LIV Indigo complex, under construction at Olympic Park in Sydney, is the seed asset in the build-to-rent club.
The complex is being built to a standard that will reduce emissions by 40 per cent compared with a National Construction Code compliant building, and is also targeting a 4-Star Green Star Design and As-built rating.
Mirvac has spent an extra 0.7 per cent of the project’s original capital cost to reach these benchmarks.
Passive design, increased insulation and high-performance double glazing for all apartments
LED lighting in apartments; motion sensors and time clocks in common areas
Energy monitoring meters that feed into a portal enabling tenants to manage their energy
A rooftop solar system designed to generate 10 per cent of the modelled common area energy consumption
Efficient basement carpark ventilation strategy, including carbon monoxide monitors, variable speed drives to control fans and an efficient fan layout
Two high-voltage electric vehicle charging facilities and capacity for additional stations
More than 400 bicycle spaces.
Benefits for mixed-use developments
The CEFC is also working with Cbus Property to deliver leading energy efficiency standards for the $1 billion Collins Arch mixed-use development in the Melbourne CBD.
The complex is using an integrated approach to energy efficiency across its residential apartments, hotel, retail areas and office spaces, and it is expected these initiatives will deliver a minimum 20 per cent to 25 per cent improvement on the development’s carbon footprint.
Collins Arch is designed to achieve a 7-star average NatHERS rating across the residential apartments, as well a 5.5-star NABERS energy rating for the premium grade commercial office space, and a 4.5-star NABERS energy rating for the W Hotel.
Built-in features support growing demand
Ryan Rathborne, a property specialist in the CEFC Investment team said the Mirvac and Cbus developments were both using readily-available technologies at the design stage, “building in” a higher standard of sustainability to deliver long-term benefits to residents and tenants.
“These low-cost, high-impact initiatives are highlighting technologically mature and economically feasible opportunities that can be employed by residential apartment developers both large and small,” Rathborne said.
“We expect that as both property developments progress and energy use data is collected, we will see the results speaking for themselves for years to come.”