Investor perception of the business case for sustainable office buildings : evidence from New Zealand

Over recent years the global market for sustainable commercial property has been growing in importance, with rapid growth occurring overseas that has led to substantial changes in the property markets. The New Zealand property industry has been recently introduced to the concept of sustainability, and although still at an early stage is already noticing the accelerating uptake of sustainability in the industry. Although certain measures have been taken by the New Zealand Green Building Council and government mandates, there remains still a common assumption that there is considerable hesitation and skeptism in the market from both an investor’s and a building owner’s perspective.

The research presented in this paper reports on the results of an investigation into the market perception toward sustainable buildings from the investment community in New Zealand. Property developers and investors from New Zealand were surveyed about their perception of sustainable buildings in New Zealand and their actions with regards to their own commercial portfolios, as well as the impact sustainability is having upon investment decisions. This paper presents the results of research conducted into the relationship between the elements of sustainability and the market value of an office building. The paper provides an insight into the rapidly evolving area of sustainability and office buildings, with the emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

Job satisfaction versus office environment : influences on academic knowledge worker productivity

This research paper provides a more encompassing review of self-assessment of a variety of knowledge worker activities, as well as providing the basis for these self assessments. A novel aspect is the inclusion of motivational affects which are considered alongside work environment influences on productivity. A questionnaire was administered on 25 academics. The group was questioned for their perceptions of their productivity for a range of their everyday activities and what areas of their work environment enhanced or disrupted their productivity. Job satisfaction was also assessed. The results from a series of self-assessments show that on the whole, the sample perceive themselves to be reasonably to very productive in all tasks undertaken. Staff satisfaction measures are generally very positive with collaboration and job enjoyment being motivational factors for this group. Noise levels, thermal conditions, poor lighting and a lack of storage seem to be the biggest inhibitors of productivity. Having a window to look out of and access to natural light seem to enhance an academics view of their productivity.

Office building characteristics and the links with carbon emissions

Purpose – The purpose of this paper is to present research which analysed energy consumption in the Melbourne central business district (CBD) office stock and examined all buildings to identify CO2 emissions in 2005. The rationale was that, by profiling a large group of buildings, it would be possible to identify characteristics of the stock. For example, do older buildings typically emit more CO2 per square metre than newer buildings?
Design/methodology/approach – This research conducted a detailed analysis of all Melbourne CBD office stock to identify which patterns and trends emerged regarding building characteristics and carbon emissions. The study examined variables such as building size, number of employees, occupancy levels, physical characteristics and building age.
Findings – By examining all office stock and aggregating data, the results confirm that it is possible to identify general physical building characteristics and carbon emissions. This research confirmed that clear relationships existed within the Melbourne CBD office stock in terms of building size, age and the density of occupation in relation to CO2 emissions.
Originality/value – Practitioners can apply this knowledge to the professional advice they give to clients to assist in achieving increased energy efficiency in the office stock, for example in refurbishment being conscious that smaller buildings will be generally less energy-efficient than larger ones.

The relationship between sustainability and the value of office buildings

There is an increasing body of evidence to suggest that the development of sustainability in office buildings and the acceptance of these buildings in the broader property market is increasing. However a gap still remains between the value of sustainability and the value of the building from an International Valuation Standards Committee (IVSC) definition of market value. Current literature is limited in the investigation of the impact of sustainable criteria on value component when undertaking a valuation of a commercial office building. Whilst substantial advances have been made in sustainable design and construction aspects, as well as reducing implementation costs and enhancing benefits associated with sustainability, there appears to be inherent barriers in adopting sustainability in the valuation process for the property industry.

This paper examines the limited previous research into the elements of sustainable criteria that impact upon property value, and in turn should be reflected in traditional valuation methods. The immaturity of the property market for sustainable building is such that current valuation methods do not appear to have significant evidential proof of increased property value through sales or lease evidence for sustainable buildings. Furthermore, this lack of market evidence makes it inherently difficult for valuers to assess the real market value of sustainable buildings through current valuation methodology. In other words, the level of risk associated with incorporating different levels of sustainability into office buildings appears difficult to measure using a market value perspective in today’s property market. Accordingly this paper examines current research that has been undertaken to identify particular sustainable criteria that potentially affects the value of a sustainable building. For example, previous research suggests that sustainable criteria impact upon the valuation equation through rental growth, depreciation, risk premium and cash flow. This paper also examines how other studies have viewed the impact of sustainable criteria and how they are weighted within the valuation equation. The discussion provides an insight into the rapidly evolving area of sustainability and office buildings with emphasis placed on the valuation process that seeks to assess a hypothetical purchaser’s perspective of this relationship.

Office buildings and the environment : the increasing importance of ESD

The links between the built environment and sustainability issues such as fossil fuel consumption and climate change is clear. In developed countries buildings contribute around half of all carbon dioxide emissions and offer considerable scope for a significant contribution to sustainability through ecologically aware design and increased energy efficiency (BRE, 1996). The Australian commercial stock emits 12% of all greenhouse gas emissions however the commercial property market has some inherent barriers to sustainability (DSE, 2005). A substantial proportion of the stock is owned by institutional investors who are unconvinced by the need to improve their stock and pass on running costs to tenants (Callender & Key, 1997). As capital values are not greatly affected by sustainability, owners react by doing little or nothing and the effect is to limit sustainability related investment and undermine efforts to deliver sustainability in the sector.

Furthermore the efficiency of buildings declines over time and whilst energy efficiency is important to new design, the existing stock must be improved if urban built environment greenhouse gas emissions are to be reduced. Much of the property and surveying research has previously adopted an illustrative case study approach advocating the benefits of ESD and energy efficiency in existing buildings. This research adopts a radically different approach and profiles the entire office stock of a global CBD, namely Melbourne, which is seeking to become a carbon neutral city by 2020. The research also employs scenario forecasting to model future changes to the stock over a fifteen year period. This paper sets out the rationale for the research and establishes the methodological approach adopted by the research team.

Delivering sustainability in office building refurbishment

The effect of climate change and global warming continues to receive attention with many governments and organisations acknowledging the long-term problems associated with the trend, although offering limited realistic solutions. Office buildings have been identified as a contributor to global warming during the construction phase, however during the building lifecycle there is a greater contribution to CO2 omissions. Whilst various building designs and construction techniques have evolved to improve energy efficiency, the focus has largely been placed on new buildings where it is easier to incorporate change and innovative approaches. However, the proportion of new buildings constructed each year is relatively small in comparison to existing building stock, which requires regular capital expenditure to maintain and attract new tenants within a competitive marketplace. Overall the degree to which capital expenditure for an existing building actually includes energy efficiency is difficult to measure, although appears to lag substantially behind sustainable building techniques for a new building.

This study investigates the degree to which energy efficiency is incorporated into office building refurbishment and capital expenditure, with the emphasis placed on a cost-benefit analysis from both the owner’s and tenant’s perspective. Whilst it may be argued that a newly constructed energy efficient office building may be cost prohibitive, various steps may be taken to upgrade the energy efficiency of an existing building. This project identifies differences between varying levels of capital expenditure to ensure an existing building is more energy efficient, with the emphasis placed on (a) the cost of implementation and (b) the potential for tenants to acknowledge the increased energy efficiency via higher rents. In order to develop a research framework, a thorough literature review was conducted of three disciplines being construction technology, building refurbishment and property management.

Office buildings and the environment : the increasing role of facility managers

The Australian commercial stock emits 12% of all greenhouse gas emissions however the commercial property market has some inherent barriers to sustainability (DSE, 2005). A substantial proportion of the stock is owned by institutional investors who are unconvinced by the need to improve their stock and pass on running costs to tenants (Callender & Key, 1997). The links between the built environment and sustainability issues such as fossil fuel consumption and climate change is clear. In developed countries buildings contribute around half of all carbon dioxide emissions and offer considerable scope for a significant contribution to sustainability through ecologically aware design and increased energy efficiency (BRE, 1996). As capital values are not greatly affected by sustainability, owners react by doing little or nothing and the effect is to limit sustainability-related investment and undermine efforts to deliver sustainability in the sector. Facility managers are in an influential position to help address sustainability issues via an increased awareness of energy efficiency and CO2 emissions.

Even though the efficiency of buildings is primarily focused on new stock, with an existing churn replacement rate of approximately 2-3% the existing stock must be improved if urban built environment greenhouse gas emissions are to be reduced – clearly the management of existing stock must therefore contribute to substantial savings in energy use. Much of the property and surveying research has previously adopted an illustrative case study approach advocating the benefits of ESD and energy efficiency in existing buildings. This research adopts a radically different approach and profiles the entire office stock of a global CBD, namely Melbourne, which is seeking to become a carbon neutral city by 2020 (City of Melbourne, 2003). The research also employs scenario forecasting to model future changes to the stock over a fifteen year period. This paper sets out the rationale for the research and establishes the methodological approach adopted by the research team. The results provides a unique insight into the variations between different building types and grades of office buildings, which in turn will allow facility managers to gain a better understanding of where gains in energy efficiency can be made.

The role of the surveying profession in reducing carbon emissions of existing office stock in the Melbourne CBD

As professionals, surveyors and property professionals are in the front line and have a moral and ethical duty to take a lead when advising clients appropriately on measures to reduce greenhouse gas emissions from their buildings. As such, surveying professionals and the profession must increase their knowledge base and enhance their skills in respect of built environment sustainability. This research conducted a detailed analysis of energy efficiency in the Melbourne CBD office stock and examined all office buildings to identify what was likely to happen between 2005 and 2020 in respect of carbon emissions. The research profiled a business-as-usual or no change approach, a minor change approach, an intermediate approach, and a major change approach. The study examined variables such as building size, number of employees, occupancy levels, visual appearance and age. After modelling all CBD office buildings, it was recommended that an intermediate change scenario should be adopted. This course of action incorporates a transition period and includes increasing ‘green power’, increasing the number of employees per buildings, as well as reducing electricity and gas consumption. It was concluded that the surveying profession should adopt a proactive stance towards office buildings and climate change, which is currently being stifled by barriers such as a lack of education and perception concerning the long-term benefits of energy efficient office buildings. To date there has been much debate and promotion of policies to encourage the uptake of sustainability practices within the property sector; however, this research concludes that action is needed if targets are to be met.

Energy analysis of the construction of office buildings /by Graham J. Treloar

Buildings have a significant impact on the environment due to the energy required for the manufacture of construction materials. The method of assessing the energy embodied in a product is known as energy analysis. Detailed office building embodied energy case studies are very rare. However, there is evidence to suggest that the energy requirements for the construction phase of commercial buildings, including the energy embodied in materials, is a significant component of the life cycle energy requirements. This thesis sets out to examine the current state of energy analysis, determine the national average energy intensities < i.e. embodied energy rates < for building materials and assess the significance of using national average energy intensities for the energy analysis of a case study office building. Likely ranges of variation in the building material embodied energy rates from the national averages are estimated and the resulting distribution for total embodied energy in the case study building simulated. Strategies for improving the energy analysis methods and data are suggested. Detailed energy analysis is shown to be a useful indicative method of quantifying the energy required for the construction of buildings.

Invisible labour : home–school relations and the front office

When school front offices are mentioned in research on schools and their relations with the community, it is often to describe how parents/carers and the public are treated officiously and/or inappropriately. In professional development materials, schools are urged to improve communication, and occasionally directed to consider the practices of the front office staff. Yet when schools send out information to parents/carers, the school office is usually the place to which all queries are directed. However, there is almost no detailed research that looks at what actually happens in this place. In this paper we draw on a small-scale commissioned research project which began to fill this gap. In seeking to reread our data and push further on analysis, we have come to realize that those who work in school front offices are women whose physical and emotional labour is not only rendered largely invisible in a wide range of literatures relating to home-school relations but is also inadequately recognized through recruitment practices, professional development and remuneration. We suggest that there needs to be further research into the high energy, multitasking, nurturing work that goes on in school front offices.