New loan for commercial property owners to green investments

FUKUOKA, JAPAN - JUL 09: View of Acros Fukuoka on Jul 09, 2015 in Fukuoka, Japan. Acros Fukuoka is the eco-building and landmark of Fukuoka that has a green roof.; Shutterstock ID 302474765; Departmental Cost Code : redownload; Project Code: redownload; PO Number: redownload; Other: redownload
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COMMERCIAL property owners may be able to increase their investment loan by up to 20% to complete upgrades that achieve a NABERS rating improvement or reduce the asset’s carbon emissions, after Commonwealth Bank expanded its suite of sustainability loans.

The Property Sustainability Upgrade Loan will apply to sustainability measures such as energy-efficient lighting, smart building management systems, solar panels and battery storage, heating, ventilation and air conditioning upgrades, and water recycling systems, as well as cladding and insulation upgrades.

CBA developed eligibility criteria with NSW Department of Planning, Industry and Environment that it believes will help business reduce emissions by at least 30% and meet or exceed average market performance.

Clare Morgan, CBA’s executive general manager, business lending, said investing in sustainability upgrades also made commercial sense in that it can boost the value of properties while reducing operational costs, making the property more attractive to long-term renters and potential buyers.

RICS research found around more than half of property players believe that green and sustainable buildings achieve a rent and a price premium over comparable non-green and sustainable buildings. More than one-third believe that the rent and price premium stands at up to 10%; around 15% judge it to be higher still.

More than 60% of Australian commercial office buildings currently rated have a NABERS energy rating below 5 stars. Buildings account for around 50% of electricity use in the country, and almost a quarter of emissions, according to the Property Council of Australia and Green Building Council Australia’s Every Building Counts initiative.

The International Energy Agency says building offer one of the largest opportunities for low-cost carbon abatement in developed countries like Australia.

“We appreciate it’s a challenging time with some buildings experiencing reduced foot traffic or lower occupancy, however, for some businesses this has become an ideal time to undertake building upgrades and property improvements and we’ve already seen strong demand,” Morgan said.

New Cushman & Wakefield research shows hybrid working is actually seeing corporate Australia’s carbon emissions climb, with emissions from Australians working-from-home outweighing those lowered emissions from commercial buildings.

“CBA and NABERS worked together to design this offer that incentivises building upgrades that will result in real and measurable sustainability outcomes. We’re excited by the potential of partnering NABERS data sets with a sustainable loan product that could have a positive long-term impact on emissions reductions,” Magali Wardle, head of market development at NABERS said.

The announcement follows the recent launch of CBA’s Green Loan for up to 600,000 retail customers, while it also partnered up with Royal Adelaide Hospital operator Celsus on the country’s and the global healthcare sector’s first sustainability loan, and with Queensland beef producer Stockyard Group for a sustainability-linked loan in what is also an Australian first for the agriculture industry.

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