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Kane Tarrant of Colliers International discusses the importance of NABERSNZ ratings for the workplace

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Landlords and tenants can both benefit from NABERSNZ ratings highlighting energy efficiency in the office, says Kane Tarrant of Colliers International

Kane Tarrant of Colliers International discusses the importance of NABERSNZ ratings for the workplace


Energy rating labels on products are designed to give consumers power. When we're buying a new car or washing machine, most of us pay at least some attention to the number of stars on the label denoting how much our shiny new purchase will cost us to run over time.

Now a similar scheme applies to office buildings in New Zealand – and it's starting to change the way both tenants and landlords think about a building's performance. NABERSNZ, the energy benchmark for commercial buildings, has been in the market for approximately 18 months.

Based on Australia's long-running NABERS scheme, our tailor-made Kiwi version gives owners a clear way to communicate to the market how efficiently their building performs – and it gives tenants the power to demand, "Show me the stars."

NABERSNZ is a clear, independent benchmark that shows tenants exactly what they're getting. And as the Australian experience shows, it's an effective way to improve energy use across our commercial building sector.

To date, approximately 20 NABERSNZ ratings have been certified, with many more owners investing in preparing their buildings for ratings, through metering and energy-efficiency upgrades. We're expecting to see more buildings certify their ratings this year, as this preparatory stage ends.

Long-term impact

What long-term impact can we expect NABERSNZ to have? It's worth looking to the Australian market, where NABERS has brought demonstrable changes, both in energy performance and asset value. After three NABERS ratings, Australian buildings have typically improved energy efficiency by 11%, rising to 20% by the fifth rating. Investment Property Databank (IPD) figures show that higher-rated buildings have lower operating costs and higher net operating income. They are also more popular with tenants, showing lower vacancy rates and longer average leases. Tenants are more likely to consider the total cost of occupancy.

Here in New Zealand, NABERSNZ is still in its infancy, and there's been debate about whether a voluntary scheme has the necessary ‘grunt' to make an impact in our property sector. The premium end of the market has been quickest to adopt it, which is not surprising.

In Australia it's mandatory. Without regulation, is it reasonable to expect local owners and tenants to care about how many kWh of energy their building uses per square metre? I think the answer is yes.

NABERSNZ gives tenants new transparency and new power. When tenants negotiate an office lease, knowing the rating helps give certainty about ongoing operating costs. If the information exists, which tenant wouldn't want a clear benchmark that shows long-term running costs – not to mention how well the building is commissioned and maintained for staff comfort?

From the other side of the fence, NABERSNZ also contributes to the landlord's asset value. It's your classic ‘win-win'.

Commercial property experts have been taking a close interest, and training staff to advise on NABERSNZ. We're already starting to see lease agreements specifying minimum NABERSNZ ratings.

Public sector uptake

We expected government agencies and councils to be early adopters, due to the onus on the public sector to demonstrate value for money. This was borne out, with many of the early NABERSNZ ratings from the public sector. NABERSNZ has been stipulated in government leases in Christchurch.

Widespread uptake of NABERSNZ will be driven by tenant demand, and when a NABERSNZ-rated building becomes de rigueur across government, I'm sure every landlord will be taking notice.

For owners and tenants in Green Star-rated properties, this is the way to prove your building performs the way it's supposed to. While a Green Star building has the potential to be very efficient, its actual performance will come down to the way it's commissioned, run and maintained.

Long term, if NABERSNZ works as intended we'll have both better-informed tenants, and higher-performing buildings.


First published date: 11 December 2014

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