A new environmental scheme that has been proven to boost property values by more than 20% has launched in the UK as part of the built environment’s ongoing journey towards net zero carbon.
NABERS – the National Australian Built Environment Rating System – is an energy efficiency in-use ratings system that has been active in Australia for two decades. It is being brought to the UK through the Better Buildings Partnership and BRE. BRE will administer the system, which rates buildings on a 1-6 star scale, and will be in charge of sharing data from the scheme with the wider market.
NABERS ratings measure and verify the energy use of offices, helping owners to target, measure and communicate the energy performance of their buildings. The rating can be used to demonstrate whether offices are on a net zero carbon trajectory and provide investors and occupiers with the confidence that the buildings they own and occupy are aligned with their climate change ambitions.
In Australia, a high NABERS rating has not only been found to increase the value of an asset by more than one-fifth but, according to figures from Real Investment Analytics, it also increases average lease lengths by 14.5% and occupancy levels by 3.5 percentage points.
Concrete benefits
Carlos Flores, director of NABERS, said: “There are really concrete business benefits to sustainability beyond just saving money on bills. In Australia today, if you have a building that has a high NABERS rating, you have better financials on almost every metric that is important for the office market. Buildings with high NABERS ratings are worth a lot more money because you are buying a building that is likely to have fewer vacancies and longer leases. That building is going to give you better returns, so we are seeing people pay more money for them.”
He added: “The wall of investment has moved on. The number of investors that are looking to invest their money in businesses that are taking meaningful action on climate change has grown dramatically in the last 10 years.”
If you have a building that has a high NABERS rating, you have better financials on almost every metric that is important for the office market
– Carlos Flores
Several UK landlords have committed to the new scheme, which will apply to new-build properties and existing assets, through the BBP’s Design for Performance initiative. A dozen landlords, including Landsec, British Land, Derwent London and Great Portland Estates, will use the scheme on 13 development projects across the UK, representing around 5m sq ft.
BBP chief executive Sarah Ratcliffe said: “This isn’t a rating scheme for the sake of a rating scheme. It is about helping to drive improvements in performance in commercial buildings across the UK.”
Ratcliffe said the rating, which has to be renewed annually, will give investors confidence that their ambitions around energy performance for buildings they buy are met.
Less talk, more action
The launch of the scheme comes at a critical time for the industry, with government expected to launch a consultation on energy performance disclosure for commercial buildings before the end of the year. That disclosure could lead to the mandatory reporting of operational energy use.
Shamir Ghumra, head of building performance services at BRE, said: “We need to act and the more that government sees that industry is acting and taking responsibility for its impacts, the better. Government and UK plc want to position themselves as being the vanguard of this change.”
“In the UK, we don’t have a rating system that allows us to measure energy performance in use properly and make that transparent to the market,” added Ratcliffe. “Having a rating system that allows us to measure and rate existing buildings is going to be really helpful in enabling us to understand the scale of challenge we face and to get on and do something about it, not just talk about it”.
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