Managing Energy Efficient Space

Choosing and Managing an Energy Efficient Space:A Best Practice Guide for SME Commercial Office Tenants

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As an overview, here are the top ten quick wins:

Download the RICS ‘Leasa’ App from www.rics.org/Leasa You can use the Royal Institution of Chartered Surveyors (RICS) Leasa App to identify and compare the energy efficiency of buildings and individual tenancy spaces you might wish to lease. (See Chapter 2.)

Act in good time This is typically a tenant’s biggest mistake. Depending on the size of your tenancy, it can take eight months to two years to review your current and future space requirements. Careful planning and the right advice are essential. Your tenant advisor will be able to suggest the optimum time frame. (See Chapter 2.)

Use a RICS-qualified tenant adviser The leasing process is complex, costly and needs expert market and transaction knowledge. Premises are often the second or third highest business cost. RICS chartered property professionals are trained to meet demanding global property standards and to abide by rules of professionalism and conduct. For details of a RICS-qualified tenant adviser contact [email protected]. This should be done at the outset of the process to achieve the best result.

This guide is for small to medium-sized enterprise (SME) commercial office tenants. It offers advice on choosing office space for lease and shows how you can benefit by choosing a space that is energy efficient. The guide also explains how you can manage your tenancy in an energy efficient way.

Ten Quick Wins

Undertake due diligence You’ll need to undertake a detailed investigation of the premises you have shortlisted – how they are designed and managed and meet your specific needs. (See Chapter 2.)

Choose a tenancy in a building that is energy efficient You should aim to be in a building with a National Australian Built Environment Rating System (NABERS) Energy for Offices base building rating of 4.5 or above. The RICS Leasa App will show you the ratings for buildings that have been assessed as part of the Building Energy Efficiency Certificate (BEEC) process. For broader standards, see the Property Council of Australia (PCA) publication A Guide to Office Building Quality which sets benchmarks for the quality of buildings. (See Chapter 3.)

Choose a tenancy which has energy efficient lighting You should aim for a tenancy which has lighting with a Nominal Lighting Power Density (NLPD) below 7 W/m2. The RICS Leasa App will show you the lighting ratings for tenancies that have been assessed as part of the BEEC process. (See Chapter 5.)

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Set sustainable standards for your tenancy fit-out and tread lightly Use the Green Building Council of Australia (GBCA) Green Star – Interiors rating tool and consider achieving a rating for your tenancy. (See Chapter 3.)

Consider the advantages of a ‘green lease’ Green leases provide obligations on both the owner and tenant in relation to environmental and energy efficient building performance and improve the environmental performance and energy efficiency of the tenancy. (See Chapter 5.)

Record and monitor your energy consumption You can’t manage if you don’t measure! Use the RICS Leasa App to analyse your energy consumption and put in place an energy plan and audit to improve your energy efficiency. (See Chapter 4.)

Manage the energy consumption in your tenancy Buy the right equipment. Turn equipment off and manage the standby time of appliances. Set up any supplementary air conditioning properly. Promote, report on and encourage energy efficiency. Use the RICS Leasa App to record the energy consumption of equipment in your office. (See Chapter 5.)

Acknowledgement

This activity received funding from the Australian Government Department of Resources, Energy and Tourism as part of the Energy Efficiency Information Grants Program.

Disclaimers

The views expressed herein are not necessarily the views of the Commonwealth of Australia, and the Commonwealth does not accept responsibility for any information or advice contained herein.

This document is a guide only. It is not intended to be an instruction manual, nor a detailed step by step process which must be followed, but rather a guide to the principles of choosing and managing space for lease. This guide does not provide legal advice and is general in nature. You are advised to take property and legal advice from a properly qualified advisor.

Copyright

Published by RICS Oceania (First Edition 2013) RICS Oceania, level 16, 1 Castlereagh Street, Sydney, NSW, 2000.

No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or publisher.

© Copyright RICS June 2013. Copyright in all or part of this publication rests with RICS, and save by prior consent of RICS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying, recording or otherwise, now known or to be devised.

RICS gratefully acknowledge the work of the RICS Oceania working party in the drafting of this Guide

John Goddard FRICS. J Goddard & CoJenny Goddard, J Goddard & CoSteve Hennessy FCIBSE, WT SustainabilityNick Hudson, RICS Oceania

and the following RICS Chartered property professionals for their peer review;

Mike Franklin MRICS, Franklin Property ConsultingJames Shanks MRICS, Chapman ShanksGiles Knapman MRICS, Jones Lang LasalleMark Daniel MRICS, Property BeyondPaul Murgatroyd MRICS, CBRE Global Corporate ServicesSara Wilkinson FRICS, University of Technology Sydney

Bruce Thomas - Carbon Training International

This Guide has been printed on re-cycled paper

3TEN QUICK WINS

Ten QUICk WInS 02

AbbRevIATIonS USeD In ThIS GUIDe 05

AboUT ThIS GUIDe 06Professional Advice 07Free Mobile Apps and Web Tools 07

PART 1 – ChooSInG An eneRGy effICIenT TenAnCy 08

ChAPTeR 1: Why eneRGy effICIenCy IS IMPoRTAnT foR SMes 09Five Reasons to Act Now 09Why does Energy Efficiency Matter? The Big Picture 11

ChAPTeR 2: RevIeWInG yoUR LeASInG oPTIonS 14Seek professional advice 14Allow plenty of time 14Do you stay or do you go? 15Moving to New Premises 16Steps Involved in Choosing New Premises 16Preparing your tenancy brief 16Inspecting premises – what to look for 16Tenant Due Diligence 18Evaluating and Comparing the Various Premises 18

ChAPTeR 3: CoMPARInG SPACeS To LeASe – CRITeRIA To ConSIDeR 20Total Occupancy Costs 20Location 23How Much Space do You Need? 23Energy Efficiency 23Commercial Building Disclosure 25Hidden Costs of Poor Performance 26Grade (quality) of the Building 27End-of-trip Facilities 28Tenancy Ratings 28

Contents

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AbbRevIATIonS USeD In ThIS GUIDeBEEC Building Energy Efficiency Certificate

EUA Environmental Upgrade Agreement

CBD Commercial Building Disclosure

GBCA Green Building Council of Australia

IEQ Indoor Environment Quality

NABERS National Australian Built Environment Rating System

NLA Net Lettable Area

NLPD Nominal Lighting Power Density

PCA Property Council of Australia

RICS Royal Institution of Chartered Surveyors

SME Small to Medium-Sized Enterprise

PART 2 – UnDeRSTAnDInG AnD MAnAGInG yoUR TenAnCy eneRGy 29

ChAPTeR 4: UnDeRSTAnDInG yoUR TenAnCy eneRGy USe 30Buying Power and Saving Money 30GreenPower 30Cogeneration and Trigeneration 30Negotiating with energy retailers 31Using the RICS Leasa App to Compare Energy Efficiency 31How to Read Your Energy Bill 32Using the RICS Leasa App to Track and Review your Energy Use 34

ChAPTeR 5: MAnAGInG yoUR TenAnCy eneRGy USe 35Control versus influence 35Typical Tenancy Energy Breakdown 36Energy Audits 37Energy Savings Action Plans 37Benchmarking Energy Efficiency using NABERS 38Choosing Energy Efficient Equipment 38Lighting 40Supplementary Air Conditioning 42Green Leases 44Case Study – Optimising Office Energy Consumption 46More information 48

ChAPTeR 6: LookInG AT The bIGGeR PICTURe – MAnAGInG yoUR TenAnCy CARbon eMISSIonS 49A Brief Introduction to Carbon Emissions 50

fURTheR InfoRMATIon 57

APPenDICeS - CheCkLISTS 57Appendix A - What to look for in a tenancy 58 Appendix B - Inspecting the premises 60 Appendix C - Possible deal breakers 63

5

For most SMEs the process of finding suitable space to lease, or deciding whether to stay in an existing premises, can seem extremely complex. There are many costs, benefits, obligations, processes and choices to consider.

A key aim of this guide is to show how you can address energy efficiency as part of the tenancy leasing process. This can be achieved through selecting the right building and the right space for lease, managing the fit-out appropriately and operating the leased premises efficiently.

The guide is presented in two parts:

• Part 1 – Choosing an Energy Efficient Tenancy

• Part 2 – Understanding and Managing your Tenancy Energy.

This guide is for commercial office tenants who are considering moving to new premises, and for tenants who wish to find out how to better manage their energy use. The guide focuses on small and medium-sized enterprises (SMEs) leasing less than 2,000 m2 or with less than 100 staff, though the principles can equally be applied to larger tenancies.

About this Guide

This guide provides best practice advice on:

• understanding the leasing process and where to find the best independent advice

• deciding whether to stay in an existing tenancy or move

• prioritising the key features of different tenancies

• what to look for when inspecting tenancies

• what to include in negotiations with your existing or new building owner

• making informed decisions about different tenancies

• understanding total occupancy costs

• why energy efficiency is important for tenants

• how to choose an energy efficient tenancy

• how to manage and improve energy efficiency in a tenancy

• the measurement, management and reduction of tenancy carbon emissions.

ABOUT THIS GUIDE6

ThInkInG AboUT MovInG offICeS?Factors you should consider carefully include:

• the amount of space required

• the total occupancy costs of the tenancy (rent, outgoings, incentives, ongoing tenancy energy costs, fit out costs, make good costs etc.)

• the costs to exit your current premises – make good and write offs

• the time a relocation project takes from planning to physical relocation

• business and financial priorities and objectives

• whether you have the internal resources to project manage a move

• key features of the tenancy (location, views, standard of building, ceiling height, lighting, indoor environment quality etc.)

• the lighting efficiency of the tenancy

• the environmental performance of the base building and the benefits that it can bring to its tenants.

PRofeSSIonAL ADvICeThis guide will not take you through every detail of leasing a commercial office tenancy but aims to help you better understand the leasing process, so you can ask pertinent questions and get the information and help you will need at the right times.

The process of evaluating your requirements, choosing a tenancy and negotiating optimal lease terms with your building owner can be critical to the success of your business. While this guide is a good starting point, we strongly recommend that you obtain professional advice from a tenant adviser.

RICS-qualified commercial property tenant advisers have met RICS standards of education, training and professional development and are regulated by RICS to a global standard.

For advice from a RICS-qualified tenancy adviser contact RICS at [email protected] or call +61 (0) 2 9216 2333.

fRee RICS LeASA MobILe APP AnD Web TooLSIn tandem with this guide, RICS has produced a series of mobile applications (apps) and web tools to help you make well-informed decisions about the tenancy you lease and tenancies you are considering leasing.

These tools can help you to:

• compare and rank different tenancies available for lease

• calculate and compare their total occupancy costs, tenancy energy costs and tenancy lighting costs

• track tenancy energy bills

• understand how choosing a different space or changing other tenancy variables (e.g. the amount of space) will affect the energy efficiency and cost of that space.

The apps are available for Apple iPhone, iPad and Android mobile devices and the web tools are available for desktop web browsers.

To download the free apps and tools visit the RICS website at www.rics.org/Leasa

7ABOUT THIS GUIDE

Part 1: Choosing an Energy Efficient TenancyPart 1 of this guide examines the leasing process and suggests key criteria you should consider when you are reviewing your lease or considering moving to new premises. It shows why energy efficiency is important for SME tenants, and why and how you should consider the energy efficiency of the both the tenancy space and the base building.

8 PART 1 | CHAPTER 1 | WHY ENERGY EFFICIENCY IS IMPORTANT FOR SMEs

Chapter 1

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Why Energy Efficiency is important for SMEs

5 ReASonS To ACT noW:1. energy prices for businesses are predicted to rise steeply between now and 2020

Rising fossil fuel prices, ageing electricity infrastructure, and the investment needed to address this, all mean that energy costs will increase over time for most businesses. The sooner you act, the less it will cost. Significant savings can be made from the start if you position your business in an energy efficient building and tenancy.

2. Sizeable cost savings can be achieved

Tenants can achieve sizeable cost savings if the tenancy they choose is energy efficient. Choosing a tenancy with energy efficient lighting could save between $30,000 (for a 500 m2 space) and $140,000 (for a 2000 m2 space) over the term of a five-year

lease. For further details see Chapter 4: Understanding your Tenancy Energy Use, and the RICS Leasa App Tenancy Lighting Cost Calculator.

Tenancy size (nLA) m2 Cost savings from an nLPD of 7 instead of 24*

500 m2 $36,000

1,000 m2 $72,000

2,000 m2 $144,000

3. Increasing your competitive edge

Increasingly, major corporations track and manage their carbon footprints – reporting to their investors and the market. In many instances they also require their suppliers to demonstrate high standards of environmental performance. For SMEs, being a ‘good environmental citizen’ can give you an edge over your

competitors and help with business opportunities where high levels of environmental performance are required. A company’s performance in its own office can be used as proof of environmental commitment. The leverage afforded by good energy efficiency and environmental performance can be substantial.

Energy efficiency not only makes good financial sense in a market of rising energy prices, it is also part of a much bigger picture. Energy efficiency is Australia’s untapped energy resource. Australian buildings are responsible for over 20% of our total energy use, and the need for energy efficiency is here to stay as we move towards a low-carbon economy. Energy-aware companies can run their businesses energy efficiently by taking simple steps during their tenancy set-up and operation. It is not just big companies that will benefit from being energy efficient – the value of energy savings is often proportionally greater for SMEs.

Source: RICS Leasa App Tenancy Lighting Calculator *Assumes office lighting use of 60 hours per week; energy price of $0.26 per kWh; over the term of a five year lease.

9PART 1 | CHAPTER 1 | WHY ENERGY EFFICIENCY IS IMPORTANT FOR SMEs

4. Partnering with your building owner

Building owners are increasingly willing to work with tenants to jointly improve the energy efficiency of their building and the spaces tenants occupy.

By positioning your business in an energy efficient building (or with a building owner who is committed to energy efficiency), you can continue to make improvements to your bottom line by working together. A good example is tenancy lighting where the building owner would normally pay for any lighting upgrades. This can ultimately benefit both the tenant (through lower bills) and the building owner (through better building ratings). Environmental Upgrade Agreements (EUAs) are one way in which tenants can be asked to contribute to the cost of building improvements where there is a clear financial benefit in doing so.

5. Indoor environment quality and productivity

Choosing a building which is energy efficient and which operates using sustainable practices means you stand a good chance of benefitting from better indoor environment quality (IEQ). With an increasing focus on overall environmental performance, there is greater awareness of the importance of indoor environment quality. We know that good levels of daylight, better artificial lighting, outlook and views will enhance a person’s enjoyment of their workplace and can lead to better job satisfaction and productivity. IEQ is also linked to employee health and wellbeing, staff retention and recruitment. With staff being the highest cost element of most businesses, companies should look after their human resources by providing the best working environment they can. A small increase in productivity or reduction in staff turnover can far outweigh the rental cost difference of choosing a better performing building. It can also give one company the edge over the opposition when recruiting from a discerning and increasingly mobile workforce.

For more information refer to the section on ‘Managing indoor environment quality’ in the Sustainable Property Guide: www.environment.nsw.gov.au/sustainbus/SustainPropertyGuide.htm.

bUILDInG ChoICe IS MoRe IMPoRTAnT noWBuilding choice is more important today in attracting and retaining staff. In 2010 47% surveyed felt this was important but in 2012 this figure had increased to 61%.

Source: Colliers International Office Tenant Survey 2012


Why DoeS eneRGy effICIenCy MATTeR? The bIG PICTUReEnergy inefficiency has a major impact on carbon pollution and thus accelerated climate change. Climate change is having a significant impact on our economy and the environment. The effects of climate change are real and so it is sound risk mitigation to adopt energy efficient practices. The following overview will help SMEs, who are thinking about adopting energy efficient practices, to consider why their actions are important and how they connect to the bigger picture.

Climate Change and Global Warming

To understand why energy efficiency is important we need to look briefly at the bigger picture. Climate change is not new but the world is warming at an unprecedented rate linked to human population growth and industrialisation.

Climate is the average of prevailing weather conditions. However, it is the rapid change to natural systems, including weather patterns, that is causing concern. 2010 global temperatures were the warmest on record and concentrations of greenhouse gases in the atmosphere reached a new high in 2011. The start of 2013 saw record breaking temperatures in Australia and the

first quarter, January - April, was the second hottest on record. The warming picture is not just about new records. It is the lack of temperature range between day and night, and new highs being recorded outside El Nino and drought years, that builds this picture of longer-term warming.

The greatest environmental, social and economic impacts are from the frequency of extreme weather events including heat waves and floods.

For more information see the Australian Bureau of Meteorology’s National Climate Centre: http://www.bom.gov.au/climate/change/aus_cvac.shtml

5 ReASonS To ACT noW1. Energy Price Rises have been and will continue to be significant

2. Sizeable cost savings can be achieved, for example with efficient lighting

3. Being seen as energy efficient and sustainable will increase your competitive edge

4. Partnering with your building owner can help you both achieve financial rewards

5. Choosing a building which is energy efficient and which operates to sustainable practices means you will likely benefit from better IEQ and productivity

Australian Bureau of Meteorology


The Australian population is set to grow from around 23 million to somewhere between 30.9 and 42.5 million by 2050. Worldwide, the population is set to reach around 8.4 billion by 2050. There is an urgent need to consider how we build, how we occupy and how we manage our built environment. Businesses and the property they occupy will be subject to more fire, storm damage or flooding, especially along the coast and estuaries. These events will have implications for all businesses, for example in property values and insurance costs.

The need for action: government policies

The Australian Government is responding to the challenges to – and from – the built environment and is developing ways to address this by:

• reducing emissions, including support for energy efficiency

• adapting to unavoidable climate change

• helping to shape a global solution.

Carbon pollution is the main cause of the rapid climate change we need to address and manage. Australia generates more carbon pollution per person than any other developed country and this is continuing to grow at a rapid rate.

Reducing our carbon pollution means we have to produce and use energy in a cleaner, smarter way. Securing a Clean Energy Future is the Australian Government’s report outlining energy saving initiatives as part of a clean energy future. The report provides background information that can help you put energy efficiency into context.

The bIGGeR SUSTAInAbILITy PICTURe AnD RISk MITIGATIon There are many definitions of sustainability. Essentially it encompasses integrating environmental, economic and social best practice to ensure responsible management of resources. It is about a shared mission between those who live, work, trade, or manufacture. As such, sustainability is about risk mitigation, about ‘leaving enough for later’ so society and the environment in which it operates can continue to thrive. Climate change is a risk to sustainability because it presents a limitation. Factoring it in to your business plan makes social, environmental and economic sense.

“The costs to Australia of not acting on climate change would be greater than the costs of responsible mitigation. The costs of inaction would increase over time, becoming more pronounced in the second half of the 21st century.”

Garnaut Climate Change Review 2011


“The CenTRAL PRoPoSITIonS of The MAInSTReAM SCIenCe on CLIMATe ChAnGe ARe ACCePTeD by MoST AUSTRALIAnS. ThIS PRovIDeS A bASIS foR effeCTIve PoLICy ACTIon.” Garnaut Climate Change Review 2011


Chapter 2

P1

Reviewing your leasing options

Seek PRofeSSIonAL ADvICeWe recommend that you engage a professionally qualified tenancy adviser to assist you. The tenancy leasing process is complex and you will obtain a better result by drawing upon expert market and transaction knowledge from someone who does this work regularly.

RICS is the world’s largest and most prestigious professional body for property and construction professionals. RICS chartered members qualify through gaining an accredited degree or equivalent qualification and a minimum two years of structured, planned and assessed experience. Once qualified, RICS members have to abide by and are regulated by rules, codes of professional ethics and professional and technical standards which govern the way they work. For details of a RICS-qualified tenancy adviser contact RICS Oceania at [email protected].

ALLoW PLenTy of TIMeFirstly make sure that you have enough time before the end of your current lease. You will need to review your current space and potential new space against predicted operational requirements. If you do decide to move you will need to:

• find and compare potential new spaces

• decide on the new premises, agree terms and sign a lease

• finance and plan your move

• allow sufficient time to comply with any exit obligations you may have under your current lease

• and, if appropriate, complete a fit-out so you can move in before your current lease ends.

This process can take from eight months to two years, depending on the size of your tenancy. Careful planning and expert advice are key to minimising time delays, costs and risks.

If your lease is coming to an end you will need to choose between staying in your current premises and possibly upgrading them, or finding and moving into new premises. If your company is heading out on a new venture you will need to make decisions about the premises you are going to occupy. These will be critical to the operation and effectiveness of your business.

14 PART 1 | CHAPTER 2 | REVIEWING YOUR LEASING OPTIONS

Reviewing your leasing options

If you do not have sufficient time before your current lease ends, you will either have to negotiate an extension to your current lease or forego the move and stay in your current premises. A lack of time is likely to significantly reduce your ability to negotiate optimum terms with your building owner.

However, given sufficient time, negotiations to renew an existing lease, or to lease new premises, provide a wonderful opportunity for discussions with the building owner that could result in a significantly better outcome and lower ongoing costs. For example, lease negotiations provide the opportunity to reduce your energy costs – both for your tenancy and for your proportion of the base building outgoings. Previous experience is invaluable in these situations; with expert help you are more likely to achieve a ‘good deal’. These may include incentives from the building owner – a building owner incurs significant expense in seeking a replacement tenant and this can be used to an existing tenants’ advantage in leveraging more favourable terms.

Do yoU STAy oR Do yoU Go?Relocation is costly and disruptive. The minor upgrading, refreshing or refurbishment of an existing tenancy can have significant cost and time advantages, and can reduce risk. Clearly you cannot change the base building features and amenity, but by careful design you can optimise your use of those premises and avoid the costs and disruption of moving.

There are often many reasons to stay put; these might include:

• The space works for us, we like it.

• We can continue as we are.

• We do not have sufficient time to plan and move.

• We do not want to spend money on fit-out and relocation costs or the costs of moving a business (e.g. stationery, mail re-direction).

• We can negotiate a good rental/lease deal.

• We can leverage our position to improve general lease obligations and reduce future costs.

• We have a large ‘make good’ liability.

… plus many reasons particular to your company.

Reviewing the option to stay

Firstly assess and list what is wrong with your existing premises and what needs to be changed. Think about what does not work; you can use the checklist on inspecting the premises in Appendix B to assist in this process. Score your premises to see how it rates and look at the things that can be changed, and those that cannot. In addition, look at the non-tangible items such as cultural fit, down time costs and general management time required to manage a relocation.

The lease expiration date also needs to be taken into account. If your options involve significant costs you need to make sure you have a long enough lease term over which to amortse them. You need to talk to the building owner about extending your lease. These discussions may also give you the opportunity to discuss upgrades of the building owner’s equipment and possibly an incentive from the building owner to enter into a new lease or an extension of your existing lease. We recommend you talk with a RICS tenancy adviser to review and plan your strategy as part of an overall occupancy plan. Make sure that you start discussions in good time.

Establish the time or date by which refurbishment works need to be complete. This might be the date of the end of your lease. Remember that your review process needs to be complete with enough time to find new premises if your conclusion is that you are better off moving.

15PART 1 | CHAPTER 2 | REVIEWING YOUR LEASING OPTIONS

Refurbishment can be done in stages if this will make it easier to keep your business operating. There will be a balance between doing as much work, and disruption, as can be borne, and the time taken. There are benefits in doing as much work as possible and then having a grand re-opening so as to reignite staff enthusiasm. Refurbishment over long periods never appears to end. Bigger refurbishment may need staging or ‘churn’ areas that can be used for temporary locations.

If you do choose to stay and refurbish your premises you can find more information on planning a refurbishment in the NABERS Energy Management Guide for Tenants (2012).

MovInG To neW PReMISeSIf staying is not an option, or if moving to a new location is preferable, you will need to review your company’s requirements carefully. No two buildings are alike and no two tenants requirements are alike. Ensuing that your new premises will meet all your requirements is critical.

A commercial office tenancy can influence many aspects of running a business. Your new premises will:

• promote your company image to your clients and to potential staff

• define your culture and values to your employees, and can make staff proud to be associated with your company

• set the basis for your occupation costs

• set the basis for a large proportion of your company’s carbon footprint

• have an impact on how your company is structured, how it operates and how flexible its working arrangements are

• create a catalyst for change

• influence your company’s efficiency

• influence the enjoyment, productivity and wellbeing of your staff during the time they are at work.

STePS InvoLveD In ChooSInG neW PReMISeSYour tenancy adviser will help you through the following steps:

1Prepare a Tenancy brief: a detailed list of your company’s requirements

2Prepare the Request for Proposals (RfP) and issue it to the market – to building owners and their agents.

3Decide on your shortlist: assess the proposals you receive and prepare a short list of suitable opportunities.

4 Refine the offers

5 Inspect the premises on the short list with the tenant advisor

6Conduct ‘due diligence’ - detailed investigations on the quality of the building/tenancy and its services

7 Prepare comparative financial reviews of the options

8Test your fit: Undertake preliminary layout planning to make sure the available space will be adequate for your company’s needs

9 Compare, evaluate and refine your choice of tenancies

10 negotiate terms with the shortlisted building owners

11 Make your final selection

12 Complete your lease negotiations and sign your lease

Some of these steps are discussed in more detail below.

PRePARInG yoUR TenAnCy bRIefYour tenancy adviser will work with you to develop a comprehensive list of your company’s requirements. The adviser will need to understand your business and its future direction, the space you believe you might need now and in the future, any ‘deal breakers’ and the full list of criteria that are important to you. It’s essential that you or your adviser consult with staff from all areas

and aspects of your business to understand their requirements.

You can start working on your tenancy brief by writing down the issues and criteria you feel are key to your business and the space you wish to lease. (Criteria you need to consider when comparing premises are discussed in detail in Chapter 3.)

InSPeCTInG PReMISeS – WhAT To Look foR When you inspect the premises arm yourself with the information already provided by the agent or building owner. Look at the following:


General attributes

• Lobby and entry presence

• Lift quality

• Standards of maintenance and cleaning

• Security arrangements

Tenancy attributes

Finishes

• Ceiling quality

• Toilets – finishes and fittings

• Accessibility and provisions for universal access

• Quality of finishes – carpet, walls and lift lobby

Daylight and views

• Good levels of natural light that can be enjoyed by the majority of staff

• Good views with the ability to see activities and movement, rather than the back sides of adjoining buildings

• Check for dark areas and depth from the windows to the central ‘core’ area

• Beware of west-facing windows; they can be hot in the afternoons

• Are blinds fitted to control solar gain and glare?

Energy efficient tenancy lighting and controls

• The ability to sub-meter power and lighting

DeAL bReAkeRS – yoUR key CRITeRIAYou may identify some key criteria for new premises that are not negotiable. For example, your ‘deal breakers’ might include:

• a specific financial outcome (P&L, cashflow, capital Expenditure)

• minimum 4.5 star NABERS Energy for Offices base building rating

• energy efficient lighting (NLPD of 7 W/m2)

• views, accessible from two-thirds of the floor area, that show open space

• minimum ‘Grade B’ for the building (Property Council of Australia grading system)

• end of trip facilities including bike and jogging facilities to Green Star standards, i.e. 5% of the building population accommodated by showers, lockers and secure bike storage

• good quality toilets

• a location 10 minutes from a train station or 2 minutes from a bus stop.

• Lighting quality and energy consumption

• Look for a NLPD of less than 7 W/m2

• Can lighting be switched in smaller zones?

Electrical services

• Are tenancy light and power metered separately?

Mechanical services

If you are going to require supplementary air conditioning:

• What provisions are provided by the base building (e.g. tenant condenser water) and is the capacity adequate for your needs?

• Will it be charged to the tenant’s or base building’s account? Is it available through the base building’s air conditioning system or will you need to install supplementary ‘package units’?

What other environmental efficiencies are provided?

base building attributes

• Is the base building lighting upgraded to best available technology throughout the building, fire stairs, car parks, etc.? (The building owner will gain energy savings, as well as air conditioning savings, where more efficient lights are installed in air conditioned areas.)


• Is there adequate after-hours air conditioning control and zoning?

• Is there separate monitoring and cost apportioning of after-hours air conditioning (for buildings with multiple tenancies)?

What performance reporting is performed by the building manager?

TenAnT DUe DILIGenCeOnce you have reduced your options to three potential tenancies, it is time to start your detailed investigation into the way the premises have been designed and set up, how they are managed, how they will perform through the term of your lease and how much they will cost to occupy.

What information should be provided by the building owner?

In most major commercial buildings, as a minimum you should be provided with:

• the floor plan

• net lettable area

• rent, incentive and outgoings

- Determine whether quoted rent is net rent plus outgoings or gross rent including outgoings. Check whether the incentive is paid on the starting gross rent or starting net rent.

• Property Council of Australia (PCA) grading of the building

• building mechanical and electrical specifications

• details of any planned future upgrade works

• where available or required – a Building Energy Efficiency Certificate (BEEC) containing:

- a NABERS for Offices energy rating for the base building or whole building. If this rating is greater than 3 it is above average. However, many buildings now target a minimum rating of 4 or 4.5 stars.

- Nominal Lighting Power Density (NLPD) for the tenancy area lighting. Below 7 W/m2 is good. This will affect the cost you pay for energy for the tenancy lighting.

• information about whether after-hours air conditioning may also contribute to your energy and financial costs. Some buildings need to run their whole systems when one tenant calls for after-hours cooling; the costs per hour can be very high.

environmental performance

To help understand how you are likely to be treated through the lease term, you might also like to establish:

• Is the building management environmentally conscious and focused?

• Is the building being managed and maintained to optimise energy efficiency?

• What reporting through the Building Management Systems (BMS) is available to the tenant?

• Is there a building management committee that actively collaborates with tenants and the building manager to plan and optimise the energy performance?

Are there green leases in place or leases available that have some energy efficiency related aspect?

Planned upgrades

Find out whether major and potentially disruptive upgrade works are proposed to be carried out during the term of your lease. Typically disruptive upgrades may include:

• lift upgrades

• lobby upgrades

• services upgrades, particularly when they are planned out of season (i.e. to minimise disruption to air conditioning performance, air conditioning works are generally planned to be carried out during the cooler months; boilers are generally planned to be worked on in summer.)

As a useful tool, this tenant due diligence information is included as a checklist in Appendix B at the back of this guide.

evALUATInG AnD CoMPARInG The vARIoUS PReMISeSThe tenancy brief should identify the key requirements (‘deal breakers’) for your office premises and also other selection criteria that should be weighted in terms of importance. Discount options that don’t meet your ‘deal breakers’ and then score each tenancy option against your weighted selection criteria to help decide on your short list or final preferred location. (For more information about criteria to consider see Chapter 3.)

Using the RICS Leasa App to compare spaces for lease

The RICS Leasa App includes a simple ‘Tenancies’ tool to help you compare and rank tenancies you are considering.


You can find tenancies drawn from the BEEC database or enter details directly.

Once a tenancy has been chosen you can enter and rate various features of the tenancy including occupancy costs, energy costs, lease type and quality of the building/space. Tenancies from the BEEC database automatically include energy efficiency ratings for the building and tenancy lighting.

Once you have several tenancies stored in the App tool you can filter what is displayed, to either change the order of preference of tenancies, or show or hide individual tenancies. You can change the ranking of your potential tenancies and move them into the ‘short listed’, ‘not rated’ or ‘rejected’ categories by simply dragging the right icon bars up or down.

You can switch to a comparison screen which compares the features of your shortlisted tenancies. (On iPhone and iPad devices switch to the comparison mode by turning the device on its side.)

The RICS Leasa App enables you to compare the features of different tenancies.


Chapter 3

P1

Comparing Spaces to Lease – Criteria to Consider

ToTAL oCCUPAnCy CoSTSOne of the most significant criteria when choosing the right space is the total occupancy cost of the space – this is the total cost of leasing a space over the term of a lease. Total occupancy cost includes the following:

Rent

The money tenants pay to occupy a premises is normally expressed as a dollar rate per square metre, per annum. A tenant will pay rent on the basis of a gross rent (where quoted rent includes outgoings) or net rent (where outgoings are charged in addition to quoted rent). The total occupancy cost should include both rent and outgoings and any rent increases that are applied to the rent during each year of the tenancy.

A number of recent surveys have shed light on what commercial office tenants are currently looking for when leasing space in Australia. These surveys are a useful insight into what other businesses are looking for. However, as prospective tenants you should consider the full range of criteria presented in this chapter and assess what is important to you.

In 2012 Colliers International carried out surveys of Australian commercial office tenants in space over 500 m2 to assess what was important to them when leasing space. Some key results were:

• 95% of tenants want to occupy a green building.

• 61% thought building choice was important in attracting and retaining staff.

• 30% considered cost saving a primary focus.

• Specific building attributes that would help attract and retain staff included green space and bike racks.

20 PART 1 | CHAPTER 3 | COMPARING SPACES TO LEASE – CRITERIA TO CONSIDER

outgoings

Outgoings are the base building operating and maintenance costs typically shared between all the tenants in the building on a pro-rata basis. These typically include: base building energy, rates and taxes, security, insurance, management, cleaning, recycling and waste removal, repairs and maintenance.

Cleaning and other charges

Identify all other charges that may be payable to the landlord though excluded from outgoings such as tenancy cleaning, security, out of hours air conditioning etc.

Incentives

The building owner, through its agents, may offer incentives such as reduced rent or rent free periods, assistance with fit-out costs or other incentives to attract tenants to their building. Whilst the incentive may be paid at the start of the lease it will be amortised over the lease term within the P&L.

fit-out

The fit-out of a tenancy refers to the design and construction of the internal space for lease so that it meets the needs of the tenant in operating their business. This would include the office design and layout, meeting rooms, board rooms, IT rooms, partitions, temporary internal walls, furniture, carpet, storage and

alteration to base building services (e.g. supplementary air conditioning). There are costs associated with the design, planning, project management, authority approvals and construction of an office fit-out. Capital expenditure for the fit-out is usually carried out prior to occupation however the cost is amortised over the lease term within the P&L.

Relocation costs

These are costs associated with physically moving furniture, filing and storage, office equipment and IT items.

Tenancy energy costs

Historically many tenants have not considered the consumption of energy as a critical issue. However, this has changed due to rising energy costs and increasing awareness of the impact excessive energy use has on an organisation’s carbon footprint.

Tenants typically pay for the energy consumed in their leased premises directly to an energy provider or through the building owner. Tenants also pay their proportion of the energy consumed by the base building in their outgoings.

‘Make good’ at lease end

‘Make good’, or ‘dilapidations’ as it is also known, refers to the process at the end of a commercial property lease where the tenant is required

to hand back the premises they are vacating in a particular condition that is established by the terms of their lease.

‘Make good’ can be incredibly wasteful of materials and money. It is also an uncertain process for both the building owner and tenant and can be a massive distraction to the tenant who is leaving and re-establishing their business in new premises. Simplification and reduction of environmental waste should be an aim here.

Depending on the intensity of the fit-out and the extent to which the fit-out works changed the base building, the costs can range from about $120/m2 to about $350/m2. However, particular circumstances and leases differ and this affects the ‘make good’ costs. Whilst the make good costs are incurred at the end of a lease, accounting standards require a provision to be created generating a P&L cost during the lease term.

21PART 1 | CHAPTER 3 | COMPARING SPACES TO LEASE – CRITERIA TO CONSIDER

exit obligations from current sites

As with the premises you are relocating to there will be exit costs, primarily in terms of make good, which need to be assessed and allowed for. In addition leases assume this work will be done prior to the lease expiry which may lead to a requirement to pay double rent (existing and new premises) for a period of several weeks whilst make good works are completed. As this is a high cost area it is advisable to seek professional advice from a properly qualified RICS advisor who may be able to help mitigate some or all of these costs.

Professional fees

A RICS or other tenant adviser will charge a professional fee for providing technical and strategic advice, finding appropriate space and negotiating the lease. Professional advice may also be required for make good and project managing a fit out. Professional fees will also be incurred for any legal advice.

Car parking

You may require parking for a certain number of staff. Car spaces are typically an additional cost to be factored in and often do not include hidden costs such as council parking levies or Fringe Benefit Tax implications. They are generally documented on a licence separate from the lease. CBD

car parking is expensive and individual car use is carbon intensive. You may wish to consider alternative means of transport.

Using the RICS Leasa App to help you compare total occupancy costs

The RICS Leasa App has a tool designed to record and compare the total occupancy costs for each potential tenancy you are reviewing. Costs associated with tenancy lighting are automatically entered where the tenancy is covered by a BEEC. (For more information about BEECs see ‘Commercial Building Disclosure’ below.) The energy costs for equipment in a tenancy can also be recorded and included in the tenancy comparisons.


MInIMISInG ‘MAke GooD’You can significantly minimise the impact of your fit-out on the base building and thereby reduce your ‘make good’ costs:

• Tread lightly when you fit-out. Try to avoid removing or replacing base building owner’s equipment and fixtures such as floor finishes, ceilings and claddings. Brief your interior designers accordingly.

• Use systems that are free standing where possible so that their fixings do not damage the base building.

• Use wireless data systems; they dramatically reduce the cabling waste and you can take them with you.

• Use existing partitions in the premises where possible; this might reduce your ‘make good’ costs.

There are many ways that the costs and stresses from ‘make good’ can be reduced. For example, you can agree on the tenant’s liability at the lease commencement or use a ‘make good’ deed. If you don’t have an up-front agreement you should discuss the ‘make good’ with your building owner well before the end of the lease so that agreement can be reached in good time.

For more information or advice talk to an experienced RICS Chartered Building Surveyor and see the RICS guides Make Good Best Practice (Australia) (2004) and Greening Make Good Australia (2009).

LoCATIonWhen looking at a geographic area, consider issues such as:

• rents in different areas

• ease of transport for your staff, including proximity to modes of public transport that suit them

• proximity for clients and customers

• proximity of amenities such as restaurants, banks, food courts or retail

• your preferred area

• safety of access and egress from the premises.

hoW MUCh SPACe Do yoU neeD? Base your floor area requirements on the number of people who will use the space, the facilities you would expect to install (e.g. meeting rooms, computer rooms, etc.) and the way you would use the space, such as workstation style and sizes, meeting rooms and reception. More firms are considering activity-based working where desks are allocated only to the staff in the office each day, resulting in fewer desk spaces being required.

Most building services are designed to allow a density of 10m2 per person however if you are using a typical

open plan layout with a few enclosed offices and meeting rooms then most companies occupy at a density of 12 m2 to 17 m2. Further advice can be provided by your RICS tenancy adviser.

eneRGy effICIenCy energy efficiency of the building

Buildings with combined space for lease over 2000 m2 must have an energy efficiency rating which includes a NABERS Energy for Offices base building rating. A building with a lower energy efficiency rating could cost you more in outgoings.

Like many tenants, you may have a policy to occupy energy efficient buildings. If this is the case you could choose not to occupy any building with a NABERS Energy for Offices base building rating of less than 4.5 stars. (See further information below on the Commercial Building Disclosure scheme and BEECs.)

energy efficiency of tenancy lighting

Buildings with combined space for lease over 2000 m2 must also have an energy efficiency rating for the lighting in each tenancy for lease. Space for lease where lighting is inefficient will result in higher electricity bills. This rating measures the NLPD – the amount of power used by the lighting in the tenancy that is provided by the base building. This is measured in

The RICS Leasa App enables you to enter and compare the occupancy costs of existing and potential tenancies.



watts per square metre (W/m2). The lower the NLPD the better the space from a power consumption point of view (but take care that a low NLPD is not at the expense of general lighting levels). Modern lighting systems can achieve NLPDs of 7.0 W/m2 with no loss of amenity. (See further information below on the Commercial Building Disclosure scheme and BEECs.)

CoMMeRCIAL bUILDInG DISCLoSUReCommercial Building Disclosure (CBD) is a national program designed to improve the energy efficiency of Australia’s office buildings. Under the Building Energy Efficiency Disclosure Act 2010, there are mandatory obligations applicable to many commercial buildings. Most sellers or lessors of office space of 2000 m2 or more are required to obtain and disclose a current Building Energy Efficiency Certificate (BEEC). The BEEC for a particular building may cover an area greater than you intend to lease as it covers all currently lettable space in that building. A BEEC is comprised of:

• a NABERS Energy rating for the building (excluding GreenPower)

• an assessment of tenancy lighting in the area of the building that is being sold or leased, and

• general energy efficiency guidance.

BEECs are valid for 12 months and must be publicly accessible on the online Building Energy Efficiency Register (see http://cbd.gov.au/registers/beec-index). Certain exceptions and exemptions apply. BEEC Data will also be accessible through the RICS Leasa App.

The aim of the BEEC is to provide the commercial office market with credible information about the relative energy efficiency of offices that are for sale, lease and sublease. This will help businesses to consider energy efficiency as part of their decision-making process when choosing a space to lease.

Example first page of a BEEC


What if a tenancy or building is not covered by a beeC?

If the building has no BEEC it does not necessarily mean the building or the tenancy has poor energy efficiency. It might mean that the building has less than 2000 m2 to lease and the owner is not required by law to provide one.

In this situation you can still ask for a BEEC to be prepared. The building owner will need to provide:

• the NABERS Energy for Offices base building rating, and

• the NLPD for the tenancy lighting system.

Both of these ratings are relatively easy for the owner to obtain. If the building is well managed this will not be considered an unusual request from a prospective tenant.

Approximating the nLPD

If the Landlord is unwilling or unable to provide a BEEC you can work out an approximation of the NLPD in the following way:

• Count the number of light fittings in the tenancy, and the number of tubes/globes in each fitting

• Work out the total lighting wattage for each type of lamp:

- If the light tubes are 25mm (eight eighths of an inch) in diameter (older style T8 fluorescent tubes), multiply the number of tubes by 44 (1 tube equates to 44W of power consumption)

- If the light tubes are about 15mm (five eighths of an inch) in diameter (slimline style T5 fluorescent tubes), multiply the number of tubes by 33 (1 tube equates to 33W of power consumption)

- Where other types of lights are present you should ask the landlords representative to advise the rating of the globes and add 7W – then multiply this by the number of globes eg a 50W low voltage downlight is rated at 57W power consumption

• Add the lighting wattages together to get a space total, and then divide by the area of the tenancy

For example:

• 150 T8 tubes in a 500m2 office = 150 x 44 =6600W Divided by 500m2 = 13.2 W/m2 NLPD.

To get a more accurate assessment that is in line with the methodology used in determining a BEEC, you could engage a BEEC Assessor to undertake the assessment on your behalf (the CBD.gov.au website has contact details for assessors).

Another factor that will affect the lighting energy use is the way they are controlled. Basic control is via simple wall switches (this tends to be the least efficient method as it is easy for someone vacating a space to forget to turn off the lights). Some lighting systems employ time controls such that the lights automatically switch off at a predetermined time.

More sophisticated systems employ occupancy sensing such that lights are only on if a sensor detects the space is occupied. The smaller the switching zone, the better the system can match lighting to actual need eg a switching zone of 260m2 would mean all lights in that area would be on even though there might be a single occupant. However if the switching zone was then reduced to 65m2 only a quarter of the lights need turn on. Always ask about what lighting controls exist.

hIDDen CoSTS of PooR PeRfoRMAnCeThe poorer the energy efficiency of a base building, the higher the proportion of the tenant’s occupancy costs go towards base building energy costs, and the bigger the building’s and the tenants’ carbon footprint.

The following graph shows indicative percentage energy savings between the NABERS Energy for Offices rating stars, and therefore the potential energy savings achieved by improving from star to star, or the opportunities missed out by not improving.


To add further perspective to the difference between the star ratings, the difference between a 2.5 and 4.5 star building is that the carbon intensity of the 4.5 star building is 43% less than a 2.5 star building. In other words, it could use up to 43% less energy per square metre.

Businesses should look for buildings with a good NABERS energy rating (4.5 or above) and good tenancy lighting efficiency (7 W/m2 or below).

Low energy ratings generally indicate that the building owner and the management team may not be concerned with the building’s environmental performance. They may also indicate that the base building systems are old and in need of significant upgrading.

Low energy ratings certainly indicate that a prospective tenant should investigate the building thoroughly to avoid leasing a poorly performing and potentially unhealthy tenancy. You should ask about potential upgrades that could impact your occupation and enjoyment of the building at some time during the term of your lease.

GRADe (QUALITy) of The bUILDInGThe Property Council of Australia’s A Guide to Office Building Quality (2012) is the industry standard for building grading and it can help you determine the standard of building your business should occupy.

The PCA guide sets out the attributes and standards required by buildings to achieve certain grades. The grades for new buildings are Premium, Grade A and Grade B. For existing buildings they are Premium and Grades A to D.

Choosing a PCA grade that will provide you with the appropriate level of performance can help you to avoid paying for performance and facilities that you don’t require, and avoid buildings that might fail to meet your requirements.

The guide uses parameters that typically influence building quality. These are based on extensive consultation and international research to identify the elements of building quality from an occupant or investor perspective. The guide includes metrics for the assessment of performance in the following areas:

• Environmental

• Configuration

• Mechanical

• Tenant services

• Electrical

• Standby Power

• Building Management

• Communications

• Hydraulics

• Security

• Amenities

• Parking

The PCA guide is voluntary; it is not a rating tool and it is not necessary for a building to achieve every parameter nominated in the guide. However, to qualify for a particular quality grade, it is anticipated a building will overwhelmingly meet the stated criteria.

Relative carbon emissions intensity of NABERS Office Star RatingsSource: WT Sustainability (2013)

1.5 Stars0%

10%

20%

30%

40%

50%

60%

2 Stars 3 Stars 4 Stars2.5 Stars 3.5 Stars 4.5 Stars 5 Stars


A Guide to Office Building Quality may be purchased through the Property Council of Australia:

Property Council of Australia HouseLevel 1, 11 Barrack St Sydney NSW 2000Telephone: 02 9033 1900Facsimile: 02 9033 1978Email: [email protected]: www.propertyoz.com.au

enD-of-TRIP fACILITIeSIncreasingly tenants are requiring facilities for staff who run or cycle to work, or during the day. Modern standards for end-of-trip facilities will generally include:

• secure bike storage, with security cameras

• bike maintenance area including:

- bench

- compressed air

• lockers

• showers

• toilets

• additional facilities including:

- iron and ironing board

- hair dryers

- laundry services

TenAnCy RATInG - GReen STAR InTeRIoRS The Green Building Council of Australia’s Green Star – Interiors rating system is an environmental rating tool designed to rate interior fit-outs. The tool rewards the environmental performance of the fit-out as well as the way the fit-out can be made to operate within the base building.

The tool can be used to differentiate between the environmental performance of buildings you are reviewing. It can also help you achieve a significant flying start towards your own Green Star – Interiors rating based on the environmental performance of the base building.

If you want to achieve a Green Star – Interiors rating for your tenancy, you could choose a tenancy in a building that has been set up so that you will achieve credit points towards your Green Star – Interiors rating, simply by choosing that building. These are typically called Green Star – Interiors: Flying Start points. This is a great way of identifying which buildings have been set up and are being run to good environmental standards.

A well-prepared building management should be able to provide an incoming tenant with a package of base building information that can form part of the tenant’s Green

Star – Interiors environmental rating application. The base building should be able to provide about 50% or more of the points needed for a 4 star rating, 40% of the points for a 5 star rating and about 30% of the points for a 6 star rating.

Tenants have to make their own application to the GBCA for their Green Star – Interiors rating. The points achieved will depend on meeting the strict requirements of the Green Building Council of Australia.

Ask your tenancy adviser or the building’s leasing agent to find out how many Green Star – Interiors points would be available towards the tenant’s Green Star – Interiors rating if you chose to take space in their building.

For more information visit the Green Building Council of Australia’s website at www.gbca.org.au.

beTTeR bUILDInG PARTneRShIP The Better Buildings Partnership (BBP) has created a number of tools (e.g.their Leasing Lifecycle Tool) to inform and facilitate partnership outcomes in commercial leasing.

There are many components that make up building ratings and grades and tenant advisers need guidance on what your priorities are amongst these.

The BBP has created tenant-focused tools for specifying to tenant advisers the expectations tenants have of a rating or building grade.

For more information, visit the Better Buildings Partnership’s Leasing Lifecycle Tool at http://sydneybetterbuildings.com.au/leasing


Part 2: Understanding and Managing your Tenancy Energy Part 1 of this guide explains why you should consider the energy efficiency both of the tenancy spaces you are considering leasing and of the buildings these tenancies sit in.

Part 2 of this guide aims to help you better understand and manage energy use in your tenancy and see the advantages of doing so.

29PART 2 | CHAPTER 4 | UNDERSTANDING YOUR TENANCY ENERGY USE

Chapter 4

P2

Understanding your Tenancy Energy Use

bUyInG PoWeR AnD SAvInG MoneyNegotiating your own contract with an electricity retailer can help you to reduce costs and may lead to other energy management initiatives, such as monitoring, which help identify areas or periods of high energy demand.

Not all electricity is pushed through utility companies; in some instances building owners can on-sell electricity, often at favorable rates.

Energy is generally made up of two components which may or may not be distinguishable on the bill. The first component is sometimes referred to as ‘non-contestable’ and is regulated by government. This covers the cost of maintaining the electricity distribution infrastructure (poles, wires etc.) The second component ‘contestable’ is generally negotiable with energy retailers.

If you take the time to investigate your options it can bring real savings. This can be achieved through direct negotiations with an energy provider or you can engage an energy broker to negotiate on your behalf. The Australian energy regulator has a website where you can compare energy rates: www.aer.gov.au.

There are commercial switching services which offer to find better deals for your energy outgoings. You will need to provide them with information about your current energy

As a tenant, you pay for the energy consumed within your own tenancy. Tenant energy consumption is associated with your lighting, the equipment you use (such as computers, photocopiers, fridges etc.) and supplementary air conditioning (e.g. computer room and meeting room air conditioners).

bills, patterns of use and projected requirements.

The offer found on your behalf may be very good but it still pays to do your homework. You should be aware of the terms and conditions associated with moving to a new contract. Quotes can be calculated in different ways and entering information into different websites can make it hard to draw comparisons.

GReenPoWeRGreenPower is an Australian Government accreditation program for renewable energy which is generated from sources including wind turbines and solar, and which produces no nett greenhouse gas emissions, thereby reducing carbon emissions. When you purchase GreenPower accredited renewable energy you are supporting the production of electricity from renewable sources over and above mandatory government targets. 91% of electricity used in Australia is generated from the burning of fossil fuels such as coal, and only 9% of Australia’s electricity comes from renewable energy sources. Buying GreenPower is the easiest way that you can reduce the environmental impact of electricity generation.

Most Australian energy suppliers provide an accredited GreenPower product, varying in price according

to the mix of renewable energy used. The Australian Government’s GreenPower website contains a list of accredited GreenPower suppliers:

• www.greenpower.gov.au

• www.livinggreener.gov.au/energy/renewable-energy/switch-greener-energy

GreenPower and nAbeRS

Using accredited GreenPower will impact on a NABERS Energy rating.

NABERS Energy Ratings are presented in two parts:

• the rating with GreenPower, and

• the rating without GreenPower.

However, the NABERS component of a BEEC only makes reference to electricity without GreenPower.

CoGeneRATIon AnD TRIGeneRATIonSome buildings generate their own electricity, most often by using natural gas-powered engines that generate power for base building and tenant consumption. If this is available, it may give you another option for purchasing power. Cogeneration is the simultaneous production of electrical energy and thermal energy for power and heating; trigeneration produces energy for cooling as well. For more information see www.cleanenergycouncil.org.au/technologies/cogeneration.html.

30 PART 2 | CHAPTER 4 | UNDERSTANDING YOUR TENANCY ENERGY USE

neGoTIATInG WITh eneRGy ReTAILeRS• Provide information to the utility company on contract options required and any relevant site details such as

operating hours and type of space.

• Compare cost and services offered by the various retailers to ensure there are no hidden extras, such as a costs passed on for line losses. Up to 10% of electricity is lost from the grid and some retailers will pass this cost directly on to the consumer.

• Can the retailer monitor and graph a profile of your electricity use?

• Do you need account management or energy management advice? For larger consumers on a demand tariff, it would be wise to seek specialist advice.

• Decide on a contract period: a longer contract may lower the rate.

• Decide on whether you want to fix firm prices up front for the contract period to avoid any increases.

USInG The RICS LeASA APP To CoMPARe eneRGy effICIenCy The RICS Leasa App can help you identify and compare:

• the energy efficiency of buildings, and

• the energy efficiency and cost of tenancy lighting.

Using the ‘Search BEEC’ tool in the RICS Leasa App will search through the BEECs database to find the tenancy you are looking for. If the building has a BEEC, the App will show you the lighting efficiency rating for the tenancy and the NABERS Energy for Offices rating for the base building – so you can easily see which buildings and tenancies perform better. The BEEC data is also automatically included when comparing the features of tenancies in the ‘Tenancies’ tool.

The RICS Leasa App enables you to search for tenancies in the BEEC database or enter tenancy details manually.

If the building does not have a BEEC certificate you have the ability to enter the Net Lettable Area (NLA) and Nominal Lighting Power Density (NLPD) manually.

For potential new tenancies the NLA can be provided by the real estate agent advertising that space for lease. For your existing tenancy the NLA will be in your lease.

For potential new tenancies the leasing agent should also be able to provide you with the NLPD for the space in question. For your existing tenancy you should speak with the building manager.

Calculating the total energy cost for a new tenancy is challenging because usage of office equipment varies. The RICS App can help you calculate indicative costs by using information from the BEEC and the App equipment register.


hoW To ReAD yoUR eneRGy bILLThe amount of information on electricity bills can vary significantly and can be very complex. An example of a typical bill is shown and explained below. (This bill relates to a 1000 m2 tenancy in NSW and excludes GreenPower.) Not all bills would be this complex and in some instances, particularly where building owners on-sell power to tenants, they may comprise just a few lines.

A typical commercial facility’s electricity bill

1: Account details

This is a straightforward item, describing the account number, the name of the business and the electricity supply address.

2: Supply period

This covers the period of supply, and ranges approximately from 30 days to 90 days.

3: nMI

National Meter Identifier (NMI) is a unique number that identifies your electricity meter.

4: Losses

This item lists the electricity lost during transmission and distribution. These losses are equivalent to approximately 10% of the total electricity transported between power stations and market customers. The loss factors are calculated and fixed annually and represented mathematically.

5: energy charges

This is the actual charge of electricity billed per every kilowatt hour (kWh) used. The charges are based on the agreed contract rates and are negotiable. Energy usage charges can be billed either as a time-of-use charges such as peak, shoulder and


8: off-peak charges

Electricity used at all other times from the abovementioned is charged at off-peak rates. The rates are lower because the overall demand is lower. In an energy efficient commercial office setting, there should be little off-peak electricity usage as these times generally fall outside of the normal occupancy hours. Most off-peak usage would be associated with 24-hour IT and communications equipment and the associated air conditioning. If off-peak consumption is high, this might suggest poor energy efficiency (e.g. computers and lights left on when the space is unoccupied).

9: Total energy usage

Total energy usage is the sum of peak, shoulder and off-peak charges. This is expressed in kilowatt hours (kWh). The total energy usage is one of the important components of a NABERS Energy for Offices rating assessment.

10: network charges

These comprise the fees the electricity retailer pays to the electricity network owner for using their networks to supply electricity to households and businesses. For each type of ‘time-of-use’, there is a corresponding network charge. They are classed as non-contestable.

11: DUoS as per time-of-use

DUOS (Distribution Use of System) charges are based on the usage of the network system as per the peak, shoulder and off-peak times of the day. These charges are non-negotiable as they are charged by the network owners to the electricity retailers.

12: DUoS for peak capacity

The peak capacity charge, levied by the network owner, is determined by the peak electricity demand at the premises (usually recorded in a half-hour period). It is determined by the maximum demand generated by the premises on the network. Peak demand is measured in kilovolt-ampere (kVA) and is reset at each billing cycle. If you reduce your peak level of consumption (through energy efficiency and active load management) this can have a significant impact on your bill. It should be noted that this charge is not found on all bill types.

13: network access charge

This regulated fee is charged by network service providers, and relates to the ongoing provision of poles and wires to a customer’s premises. The charge depends on the location and the quantity of electricity transported to each individual meter at the premises and is non-contestable.

14: Market Charges

These regulated charges comprise administrative charges and charges relating to maintaining key technical characteristics of the power system, such as frequency and voltage. They are non-contestable.

15: neM charges

The National Electricity Market (NEM) operates as a wholesale market for the supply of electricity to electricity retailers and end-users in Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.

The charges on the bill are comprised of NEM administration charges and NEM ancillary services charges. The NEM administration charge is fixed and the NEM ancillary services charge varies from billing period to billing period based on network load characteristics. The variation occurs because maintenance of the key technical characteristics of the power system, such as frequency and voltage, is outsourced to the most competitive bidder.

off peak, or usage blocks where higher rates apply if the electricity usage exceeds a certain kWh value. The time-of-use charges are only possible if the meters installed have the capability to record this. These charges are considered to be contestable.

6: Peak charges

Peak charges apply to electricity used on weekdays between certain times of the day. For this particular bill, they apply from 2 pm to 8 pm. Some other retailers nominate times such as 7 am to 9 am and 5 pm to 8 pm. Generally, the rates are higher for electricity used during the peak period. This is a reflection of higher demand during those times of the day. Altering the usage by avoiding any non-essential electricity consumption can reduce peak charges. The rates are negotiable with the electricity retailer at the time of contract.

7: Shoulder charges

Shoulder charges apply to electricity used on weekdays or weekends between certain times of the day. For this particular bill, they apply from 7 am to 2 pm and 8 pm to 10 pm. Other retailers may have different times for shoulder rates, such as 9 am to 5 pm and 8 pm to 10 pm. Some retailers charge shoulder rates from 7 am to 10 pm on weekends and public holidays. The shoulder rates for this particular bill are similar to peak rates, and they are negotiable with the electricity retailer at the time of contract.


16: other charges

These are generally non-contestable charges fixed by government.

17: Meter provision

This is a charge for the cost of metering equipment installed at a customer’s site, as well as the meter reading and data management costs of metering services.

18: LReT charges

Large-scale Renewable Energy Target (LRET) charges represent the cost that electricity retailers pass on to customers to offset the cost of complying with the obligations under the Australian Government’s Renewable Energy Target (RET).

These Australian Government charges are levied to fund large-scale renewable energy projects such as concentrated solar power and wind farms.

19: SReS charges

Small-scale Renewable Energy Scheme (SRES) charges, along with LRET charges, are part of the Australian Government’s Renewable Energy Target.

20: Carbon charge

This charge is a result of the Australian Government’s carbon pricing scheme that began on 1 July 2012.

21: nSW energy Savings Scheme charge

The NSW Government obligates electricity retailers to buy Energy Savings Certificates (ESC) in order to meet legislated targets. The charge for this is passed down to the customers of the electricity retailers.

USInG The RICS LeASA APP To TRACk AnD RevIeW yoUR eneRGy USeThe ‘Energy Bills’ tool in the RICS Leasa App provides you with a tool to enter information found on your energy bill so you can see changes in your energy consumption and cost. Once you start entering this information, you will be better able to estimate a breakdown of your energy costs for lighting and equipment.

If you enter the date that the bill is received and the billing cycle (e.g. quarterly) the RICS Leasa App will remind you to enter your billing information. All you need to do is enter the cost (including GST) and either the total kilowatt hours shown on the bill or the meter readings.

The RICS Leasa App enables you to track and review your overall tenancy energy use.


Chapter 5

P2

Managing Your Tenancy Energy Use

ConTRoL veRSUS InfLUenCeWhen considering energy efficiency, it is important to note what you can ‘control’ and what you can ‘influence’.

Most tenants will not be able to control base building energy consumption because the responsibility for this lies with the building owner. Base building power is generally the power consumed by building services such as air conditioning, lifts, lobby lighting etc. Tenants pay for this through their rent and outgoings. You can influence the building owner and manager by asking them to operate the building more efficiently, or use a green lease to document specific energy efficiency goals etc., but you can rarely enact base building energy efficiency initiatives yourself.

However, you do have control over the energy consumed within your own tenancy. Tenancy energy consumption is associated with your lighting, the equipment you use, (such as computers, photocopiers,

fridges etc.) and supplementary air conditioning (e.g. computer room and meeting room air conditioners). You can chose when and how to operate such equipment. You can also factor in energy efficiency when making decisions on which equipment to purchase.

That said, most tenants will inherit the lighting installation when moving into a new tenancy. The lighting is generally owned by the building owner, and if it is inefficient you will pay more for power than you need to. This is the key reason that BEECs state the NLPD, so prospective tenants can make an informed choice.

Excessive energy use is unnecessarily expensive, as well as being polluting and wasteful of resources that could be used more efficiently by future generations. Achieving an energy efficient tenancy will incur little or no additional cost to set up and will save future costs and reduce your carbon footprint through the life of your tenancy.

35PART 2 | CHAPTER 5 | WHY ENERGY EFFICIENCY IS IMPORTANT FOR SMES

TyPICAL TenAnCy eneRGy bReAkDoWnThe diagrams below show the typical energy breakdown within tenancies, with and without supplementary air conditioning. Supplementary air conditioning can be a significant user of energy especially when it is not used efficiently.

Tenancy energy breakdown without supplementary air conditioning

Tenancy energy breakdown with supplementary air conditioning

36 PART 2 | CHAPTER 5 | WHY ENERGY EFFICIENCY IS IMPORTANT FOR SMES

eneRGy AUDITS Knowing where your energy is going is very important, especially when you are embarking upon an energy savings journey. An energy audit can be a useful exercise in this regard.

Energy auditing generally falls into three categories.

• A Level 1 audit is relatively simple and would involve a ‘walk through’ of your tenancy and a review of past consumption. Accuracy is not great, but for tenancies where energy usage is consistent a Level 1 audit can be highly cost effective.

• A Level 2 audit involves a more detailed assessment of energy use, and the results should provide greater certainty when making energy saving investment decisions. Level 2 audits are useful when variable loads are present and you are keen to get a better sense of how these impact your energy consumption.

• A Level 3 audit is the most detailed. The results of a Level 3 audit provide significant detail and consequently greater certainty when making investment decisions, but of course this comes at a price.

In most tenancies energy use is relatively clear – lights, small power (computers, printers, peripherals etc.) and possibly some supplementary air conditioning. A good office manager should be able to determine savings potentials, with a fair degree of accuracy, just through a Level 1 audit. Since a Level 1 audit is usually significantly cheaper than Level 2 or 3 audits, this means there will be more money to spend on initiatives that actually save energy.

While audits are an important tool for an office manager, they need to form part of a strategy. In isolation an audit may do a good job at identifying opportunities but it won’t deliver savings – and that’s where an energy savings action plan comes in.

eneRGy SAvInGS ACTIon PLAnS Even the best energy savings initiatives are often not implemented because key decision makers don’t make a decision. Whether due to time constraints, perceived risks or even poor management, there are shelves full of energy audits gathering dust.

A good energy savings action plan will help you identify the barriers to implementing energy savings initiatives, and come up with resolutions even before auditing starts.

A good plan will include decisions about financial hurdles. For example, you may decide up-front that energy saving opportunities that will cost less than $1500 to implement, and have a payback of less than four years, will be implemented immediately without requiring further approval.

A good plan will tease out the management barriers to implementing energy savings initiatives. This has the potential to be a painful process, especially if some senior managers are found to be unwilling to embrace energy efficiency, but it is better to know the barriers up-front (and then try to address them) rather than find them later after expending considerable time and effort.

With an energy savings action plan, the energy audit then becomes the technical component. It is obviously important but it’s only part of the equation. And, with the tough decisions being made before the audit is commenced, you have a much greater chance of delivering meaningful savings.

CitySwitch and Energy Saver support tenants in creating energy savings action plans. For more information go to: http://cityswitch.net.au


benChMARkInG eneRGy effICIenCy USInG nAbeRS NABERS has had a significant impact on commercial office space because it allows energy efficiency to be benchmarked. NABERS is now used by many building owners and tenants to better manage their energy efficiency initiatives.

NABERS is a national rating system that measures the environmental performance of Australian buildings, tenancies and homes. It is performance based and provides a rating for a building that is based on the environmental impacts from its operation. NABERS ratings provide simple indications of the environmental impact of the buildings when compared against the national average.

NABERS has the following rating systems for commercial property:

• NABERS Energy for Offices

- base building – not including tenancies and lettable areas

- whole of building – includes tenanted areas

- tenancy – individual tenancies

• NABERS Water for Offices

- whole building

• NABERS Waste

• NABERS Indoor Environment Quality.

A NABERS Energy for Offices rating is based on the amount of greenhouse gas generated due to the energy consumed. The rating includes the consumption of all energy including electricity, gas, diesel, etc.

NABERS ratings go from 0 (very poor) to 6 (market leading). For more information see www.nabers.gov.au.

GreenPower can be used to improve a NABERS rating. However, it is reported separately and is not recognised under the National Greenhouse and Energy Reporting Scheme (NGERS). For more information see www.climatechange.gov.au/reporting.

ChooSInG eneRGy effICIenT eQUIPMenTEnergy consumption should always be a consideration when choosing office equipment; the right choice can make a significant difference to your energy use. Take for instance multi-function printer/copier/scanners where two models may have identical print performances but one consumes four times the power of another. How do you know? A good place to start looking is the equipment manufacturers’ technical data sheets.

When reviewing power consumption you need to look at both power in use, and power in standby mode. Don’t just look at a nameplate rating (these can be misleading). When it comes to computers, laptops are generally more efficient than desktop computers (primarily because they need to run extended periods in battery mode and therefore have to use power wisely). That said, there are a number of energy hungry laptops on the market.

Marrying a laptop to a docking station can deliver desktop-like integration (i.e. a full-sized keyboard, mouse and monitor without the desktop energy consumption), yet it provides the flexibility to ‘undock’ and work remotely. Some organisations that have made the move to laptops have reported increased productivity because staff often take work with them when they leave the office.

Some equipment choices are made easier through energy labeling. When choosing a fridge or dishwasher for instance, you can determine the likely energy performance from the mandatory energy rating displayed on the appliance.

Of course, whatever equipment you choose must be properly managed. Putting equipment into sleep mode quickly can help, and you should ensure the automatic settings are as short as can be tolerated.

You will never be more efficient than by turning things off – so make this simple for everyone by automating the process (see the WT Sustainability case study below) or by making switches and power sockets easily accessible.

By embedding energy efficiency criteria into procurement decisions, and adapting life cycle costing as opposed to ‘first cost’ considerations, it should be possible to achieve long-term savings.

Understanding energy Rating Labels

Most electrical appliances sold in Australia have an Energy Rating Label to help you compare the electricity consumption of different appliances. The label also provides an incentive for manufacturers to improve the energy performance of their products. A Gas Rating Label can be found on gas space heaters, ducted heating and gas water heaters.

Sometimes high star-rated models can cost a little more to buy, but choosing a cheaper product with


fewer stars could end up costing you more throughout the product’s life. The running costs over the product’s lifetime can easily add up to more than the original purchase price. If you consider the running costs as a ‘second price tag’ it could help you decide which appliance is best to buy. For more information see www.livinggreener.gov.au/energy/energy-rating-labels.

What is ‘standby’ power?

Standby power is a key source of hidden energy costs and can amount to 10% of your electricity bill. It forms a major part of the base load of your consumption, i.e. the constant consumption load running 24 hours a day, 365 days a year.

Many appliances and computers have a standby mode so they can turn on quickly. However, standby mode can use a lot of energy even when the appliance isn’t being used. Sometimes it can be difficult to tell if equipment is on or off. If you switch appliances off at the wall when you aren’t using them, it guarantees that you will save energy. For more information on standby power go to: www.livinggreener.gov.au/energy/energy-efficient-appliances.

Using the RICS Leasa App to manage energy consumed by your office equipment

The RICS Leasa App includes an ‘Equipment’ tool to help you manage a list of the energy consuming equipment in your office, including a function to estimate how much power your equipment consumes each year. If the appliance has an energy star rating label you can use the annual consumption figure quoted or you can estimate the power consumption based on how long it is used and whether it has a standby low power mode.

The RICS Leasa App enables you to manage a list of the energy consuming equipment in your office and estimate how much power is consumed each year.


LIGhTInGLighting consumes a significant proportion of the energy associated with a tenancy. For tenants without supplementary air conditioning, lighting can account for 50% or more of all tenancy power used. It plays an important role from an indoor environment perspective, and can have profound effects on the occupants wellbeing and productivity. Yet many tenants have little or no say in the lighting design of their tenancy (other than the relocation of fittings to suit partition layouts), as the lighting is generally the property of the building owner.

In most commercial offices the general lighting will make use of fluorescent tubes recessed within a false ceiling. Compact florescent lights are also common (usually in ‘downlight’ fittings), and accent lighting often takes the form of low voltage halogen fittings.

The efficiency of lighting systems can differ significantly. A typical office would have a lighting level target of 320 lux measured on the working plane (usually a desk). Good lighting systems can achieve this using 7W or less of electricity per m2. Poor systems might use 14 W/m2 or more (twice as much for the same result).

Luminaires

The type of light fitting (luminaire) is critical. A cursory glance at the ceiling of most offices might lead you to think all luminaires are roughly the same. However, appearances can be deceptive. Critical differences may be apparent only to a lighting specialist, and of course the tenant when they compare energy bills.

The luminaire determines how the light from the lamp is distributed (through reflection, focus and diffusion). Some luminaires allow for wider spacing when compared with others, which in turn may mean fewer fittings to achieve the desired illumination levels. Some luminaires may be equipped with sophisticated control gear that allows the lamps to be dimmed or more effectively switched on and off (though be careful, as some control gear consumes power while in standby mode).

Lamps

The type of lamp is important. Most fluorescent tubes fall into two categories: T8 and T5.

• T8 tubes are often 1200 mm long, rated at 36 W, and have traditionally been associated with ‘ferric core’ or magnetic control gear.

• T5 tubes are thinner in diameter and often 1148 mm long. Most are rated at 28 W and they are associated with electronic transformers.

T5 fittings are often, but not always, a more efficient lighting solution, but there are plenty of offices with T5 lighting systems that have a NLPD far in excess of a desired 7 W/m2 or less and many with modified T8 fittings that have a NLPD below 7 W/m2.

Not all lamps are the same. Lighting designers use lamps with different ‘colour temperatures’ to create different looks, something to be mindful of when replacing tubes. LED (light emitting diode) lamps are becoming more prevalent, especially as replacements for incandescent lights (such as low voltage halogen). The efficiency of LEDs is improving but they are not a universal energy efficiency panacea and the decision as to when and where to use them needs careful thought. Retrofitting existing luminaires with a new type of lamp doesn’t always deliver an ideal result.

Lighting controls

The way lighting is controlled is also an important factor. Traditionally office lighting has been turned on and off from a central wall plate. When there are many circuits it can be difficult for an occupant to determine which switch serves their area, so all lights get turned on whether needed or not. If someone forgets to turn the lights off at the end of the day, the lights will burn all night and possibly all weekend. Timed reset control (whereby lights are turned off automatically at predetermined times and must be restarted manually) will help reduce the impact of people forgetting to turn lights off, but this is only one step. Occupancy sensing, such that lights turn on only when people are in a particular area, can deliver much greater levels of efficiency, provided that the areas they serve are not too large, and the times that they keep the lights on once occupancy is no longer sensed, is not too great.


Integrating occupancy control of lighting can be made easier if the lighting system has been ‘networked’. Such a system can usually be configured through computer programming as opposed to ‘hardwiring’ which means changes to the way lights are controlled can be done quickly and efficiently. Use of these systems is not yet common but is on the increase.The Commercial Building Disclosure scheme recognises the important role that lighting plays in determining the energy efficiency of a tenancy. (See Chapter 3 for more information about the CBD scheme and NLPD.)NLPD information can be very useful when comparing tenancies for lease. If a space that you are interested in leasing has an NLPD of more than 7W/m2, you could use this information in your lease negotiations. The building owner must approve any changes to the lighting system; ask them to provide a system that is more energy efficient. Also ask for lighting controls that will best work for you.

For more information about energy efficient lighting see the Energy Saver Energy Efficient Lighting Technology Report, Office of Environment and Heritage, 2012: www.environment.nsw.gov.au/sustainbus/energyefflight.htm.

Using the RICS Leasa App to understand potential lighting cost savings

The RICS Leasa APP provides a simple “Calculator’ tool to help you understand how various factors affect the cost of lighting in your tenancy and other tenancies that you may be considering. Lighting costs are affected by how long the lights are kept on, the floor area, the number and type of lights installed (which is represented by the NLPD) and the cost of electricity. You can drag the sliders to see how the cost changes. Engaging with your building owner to install energy efficient lighting can significantly reduce your tenancy energy bills.

The RICS Leasa App ‘Calculator’ tool enables you to compare the lighting costs (and savings) of different space for lease.


SUPPLeMenTARy AIR ConDITIonInGMost commercial office space in Australia is air conditioned, and the air conditioning is usually deemed to be a base building service (provided by the building owner). The air conditioning is normally designed to deal with a typical ‘nominal’ heat level, and if a tenant decides to exceed this loading they would be expected to supplement the air conditioning with additional equipment. The most common examples of where nominal loads get exceeded include computer rooms (high heat levels from IT equipment) meeting rooms (high occupancy density requires additional ventilation and cooling), training rooms and ‘trading floors’.

Supplementary air conditioning can take many forms, but generally systems make use of ceiling or floor-mounted water-cooled package units, or ‘split’ type DX (direct expansion) units. Water-cooled units would be connected to the base building ‘tenant condenser water loop’ (common in A Grade and Premium building types and often found in larger B Grade buildings) which is used to reject heat via a central cooling tower.

DX units tend to be used when condenser water loops are not available, or in mission critical applications where reliance on a third party system may be considered inappropriate. Since they rely on running refrigerant pipes to an outdoor heat rejection device, their use tends to be limited to spaces with easy access to a roof, balcony or car park. (Running refrigerant pipes through other tenancies or over a long distance can be problematic.)

Supplementary air conditioning can consume a significant amount of power, especially if the equipment has to run 24 hours a day (usually the case in computer rooms). Even a small supplementary air conditioner could end up using more power than the entire tenancy lighting system, so it is very important that the use of supplementary air conditioning is reviewed from the outset.

The first question to ask is ‘Do I really need it – can I design it out?’ For example, for a meeting area, do you really need a dedicated enclosed space, or could you use space within the open office area? The latter would be served by the base building air conditioning and this would eliminate a dedicated unit, saving not only energy but significant fit-out costs.


Computer rooms can also sometimes be designed out. The move by some companies to ‘off-site’ IT equipment (such as using cloud-based computing) reduces the need to operate temperature-sensitive servers and the like within a dedicated secure space. High-speed communication equipment can often operate at much higher temperatures, and may not require any form of additional cooling. (See the WT Sustainability case study on page 46.)

If a computer room is needed, can the heat load be ‘contained’ and reduced? Could heat-tolerant communications gear be separated from temperature-sensitive equipment, and its head load dealt with differently, e.g. through the normal base building air conditioning? Can equipment be turned off out of hours? Can the equipment be run warmer? There is rarely justification for computer room temperatures to be less than 24 degrees, and in many cases temperatures in excess of 28 degrees will still comply with equipment manufacturers guidelines.

When supplementary air conditioning can’t be avoided, it is important that it is carefully designed. Sizing is critical, and oversizing should be avoided where possible. Oversizing is an easy mistake to make because often it is difficult to determine ‘real’ heat loads (particularly when dealing with IT equipment). Time spent at the design stage will pay big energy savings dividends in the long term.

Proper control is also very important. Ensuring equipment runs only when it is needed is not always straightforward, particularly for equipment servicing meeting rooms. Manual ‘on’ and automatic ‘off’ switching can assist, especially if the ‘off’ component is determined

using an occupancy sensor. It is also important to make sure that the ‘in operation’ control parameters are correct. Poorly located temperature sensors can cause supplementary air conditioning to compete with base building air conditioning, resulting in one fighting the other, and both then running inefficiently as they try to maintain impossible conditions.

Supplementary air conditioning requires regular maintenance if it is to run efficiently. Controls need to be verified and calibrated on a regular basis; filters and coils need to be kept clean. A preventative maintenance agreement with monthly service intervals may suffice, but ensure that the contactor understands that energy efficiency is a key priority.


GReen LeASeSGreen Leases are lease agreements that contain clauses requiring the building owner and tenant to collaborate with one another to behave in ways that reduce their environmental impact. They generally include a range of topics from prescriptive energy standards and reporting to guidance in achieving and maintaining better standards of environmental performance for the base building and the tenancy.

In recent years, some property funds have made their buildings far more energy and water efficient and greener, resulting in reduced carbon footprints, higher standards of sustainable practice and reduced resource consumption. By occupying these buildings, tenants can springboard their own performance from the levels set by the building owners. The agreement of a lease between a building owner and tenant provides both parties with the opportunity to set standards and achieve greater environmental goals and aspirations than they can both achieve individually. This process takes a commitment by the tenant and landlord at the Heads of Agreement stage. It may take a little longer to set out and agree upon but there should be minimal impact on occupation costs.

Everyone benefits:

• From the building owner’s point of view, a green lease can ensure that the tenant uses the building the way it has been set up.

• From the tenant’s point of view, a green lease can ensure that the building is run to maintain good standards of resource efficiency and indoor health.

Green leases benefit the environment by encouraging the parties to work together to reduce their environmental impact and improve reporting and monitoring.


Working with a green lease

Green leases are legally binding and usually include environmental performance clauses as an attachment in the form of a green lease schedule. These schedules are usually separated because they may be subject to change from building to building or tenant to tenant. In sustainable performance there is no ‘one size fits all’; every building is different and every tenant is unique.

Rather than waiting for a lease to end, building owners and tenants can sign a Memorandum of Understanding (MoU) to bind the parties together for better environmental performance. While not legally binding, MoUs provide a level of commitment by both parties and can include provisions about reporting and communication to verify whether environmental goals have been achieved. MoUs can also be used to agree on upgrades that would be carried out by the building owner but benefit the tenant. They can be converted to green lease clauses at lease renewal.

Areas in which both parties can work together under a green lease include:

Energy and water efficiency

• Sharing efficiency ideas and initiatives

• Sharing targets

• Reporting performance

Waste minimisation

• Waste reduction strategies

- tenancy waste

- base building construction waste

- tenant fit-out waste

- waste separation

• Recycling strategies

Pollution reduction

• Materials used in fit out and building maintenance

• Cleaning materials

• Pest control materials

For more information see the RICS Guide to Environmental Performance Clauses, Commercial Property Leases Australia (2009).


CASe STUDy – oPTIMISInG offICe eneRGy ConSUMPTIon

WT Sustainability’s energy efficient tenancy

WT Sustainability

WT Sustainability (WTS) opened its new office in North Sydney during November 2011. The office is the home for the WT Infrastructure and Sustainability divisions. Twelve staff currently occupy the 204 m2 of tenancy and additional workstations have been allowed for a further seven staff.

The office is supplied with 100% GreenPower, so a 6 star NABERS Energy for Offices rating is already a given, but the staff and management were seeking a 6 star rating without the benefit of GreenPower. This case study briefly outlines the initiatives that were taken up during the tenancy fit-out to try to achieve this outcome.


Air conditioning

Meeting rooms often require a separate supplementary air conditioning unit due to high, infrequent heat loads and because they are enclosed. The WTS meeting area was left unenclosed, allowing the base building air conditioning system that serves the rest of the office to provide cooling within this area.

Computer and communications rooms can also have high heat loads, though often these are not as great as some IT professionals predict. WTS do have a secure computer rack, full of communications equipment including a VOIP telecommunications hub, but it is located in an open part of the office, again allowing the base building air conditioning system that serves the rest of the office to provide cooling within this area. The rack is generally shut down when the office is unoccupied.

The base building air conditioning airflow was re-commissioned during the fit-out to suit the new office layout.

By choosing to manage the way meeting areas and IT were delivered at the design stage WTS was able to ‘design out’ the need for supplementary air conditioning, and in the process lock in superior energy performance.

Lighting

The office layout has been set up so that there are low height partitions, and glazing has been used to partition the offices. 86% of the work settings have access to daylight based on Green Star calculations.

The WTS tenancy is fitted with Envirolite e1 light fittings. The fittings comprise either a single 37 W T8 tube or a single 18 W T8 tube, and dimmable electronic control gear. During commissioning they were all dimmed, so that the lighting levels did not exceed 320 lux. Baseline Illumination Power Density (IPD)

is 5.85 W/m2 which is 36% better than current Australian Standards, and the IPD based on section J6 of the Building Code of Australia was calculated as 3.48 W/m2 (61% better than current Australian Standards).

In terms of lighting controls, WTS has occupancy sensor cells controlling all lights including the open plan entrance, office space, tea area and photocopier area. The lighting zones do not exceed 30 m2. The lights within a zone dim to 50% if no occupancy is sensed after 5 minutes, and then turn off after a further 5 minutes of no occupancy in that zone. The times are quicker for infrequently used areas such as the tea area and photocopier area.

electrical supply

On the desks there are two separate General Power Outlet (GPO) panels. The electrical supply has been designed so that one power circuit switches off outside business hours, and another operates 24 hours a day, 7 days a week. Computers monitors and ‘peripherals’ are connected to the office-hours GPO, and anyone working back can elect to work on battery (see below) or connect to the 24-hour circuit (temporarily). By switching off the main circuit, standby loads are effectively eliminated.

The electrical supply to the tenancy has been fitted with three submeters: a main electrical meter, a submeter for the lighting and a submeter for the general power. The data from these meters is provided in real-time through the internet via the building owner’s energy metering system. WTS check the metering data at least once per day, and have used the information to better manage their energy use and further improve their energy efficiency.

Water systems

WTS inherited an instantaneous hot water system/mini boiler unit and a dishwasher. The hot water unit was turned off and replaced with a kettle which is filled and heated as required.

WTS has implemented a regime of running the dishwasher only every other day, and only during off-peak electricity hours (to take advantage of cheaper off-peak electricity rates).


office and IT equipment

WTS has elected to use energy efficient LED flat-screen monitors with adjustable arms to assist with glare control. In lieu of the traditional desktop computers, energy efficient laptop computers have been used throughout the office. Not only have these saved energy but they have enabled staff to continue working during power outages, and to work remotely should the need arise. The main WTS server is mounted off-site in a dedicated and shared secure facility. This necessitates high-speed broadband communications, but has reduced operations and energy costs significantly.

WTS has a super-efficient Fuji Xerox LED multifunction copier/printer which has been set to short standby times (the device uses 75% less energy than some comparable machines, and yet costs no more to purchase). The fridge is the most efficient currently available in its size range, with a quoted consumption of 335 kWh/year. WTS elected not to purchase a fridge/freezer as this would use more power, and the freezer section would be seldom used.

Indoor environment quality and other environmental parameters

All furniture was Good Environmental Choice Australia (GECA) approved, or recycled from the previous office. WTS negotiated with the building owner for carpets with low volatile organic compound (VOC) content, and the fit-out contractor used low VOC paint. Existing ceiling tiles were reused, and the contractor used low-emission products for joinery and composite wood substrates.

CitySwitch is a national programme where participating councils support office tenants to pursue energy efficient practices. By joining CitySwitch signatories join a network of like-minded businesses committed to improving the environmental performance of their offices. The programme supports tenants by providing a range of tools, information and events. More details on CitySwitch initiatives can be found at www.cityswitch.net.au

on target

To achieve 6 NABERS stars, WTS needed to work out how to use 78% less energy than an average office tenancy. Due to careful planning they were so confident that they could achieve this that they became the first CitySwitch signatory in Australia to commit to a 6 star rating without GreenPower, and as a consequence the CitySwitch team had to rewrite some of their procedures.

The 6 star target required WTS to use no more energy than 22 kWh per day (on average). WTS calculated they could get this average to 17 kWh per day with careful management. WTS bettered its ambitious target and in April 2013 achieved an official NABERS Tenancy Six Star Rating presently tracking at an average of 15.1 kWh per day.

business as usual

There are no surprises when you walk into the WTS office. Lights are off in areas that are not being occupied, but other than that everything looks ‘normal’. The lights are bright when needed, the IT equipment all works as it should, and the working environment is not compromised in any way. WTS goes about its daily business without any loss of amenity, yet it uses 78% less energy than a typical office.

MoRe InfoRMATIonFor more detailed information on managing energy costs in your tenancy and developing a business case for energy management refer to:

• Energy Management Guide for Tenants, NABERS, 2012: http://www.nabers.gov.au/public/WebPages/DocumentHandler.ashx?docType=3&id=66&attId=0

• Sustainable Property Guide, Department of Environment and Climate Change NSW: www.environment.nsw.gov.au/sustainbus/SustainPropertyGuide.htm


Looking at the Bigger Picture – Managing your Tenancy Carbon Emissions

Carbon footprinting is still in its infancy and the rules around what should and should not be included are still being developed. A good starting point is the publicly available Specification PAS 2050:2011 – Specification for the assessment of the life cycle greenhouse gas emissions of goods and services. This document was produced by the British Standards Institute and is part of a suite of documents that include specifications and guidance on methods of carbon management. It is available at www.http://shop.bsigroup.com/en/forms/PASs/PAS-2050.

In this chapter we explore how you can calculate, manage and potentially reduce your carbon footprint, taking your energy and environmental management a step further. Improving energy efficiency will save money and, through the reduction of the use of energy generated by the combustion of fossil fuels, you will also be reducing your carbon footprint. The awareness of company and individual carbon footprints - and an increasing awareness of our responsibility and ability to reduce them - is becoming a moral and reputational issue.

Chapter 6

P2

A key concept in any calculations is the ‘scope’ of emissions related to the product or service within a set ‘boundary’. This boundary defines the scope for the carbon footprint, i.e. which life cycle stages, inputs and outputs should be included in the assessment. The Greenhouse Gas (GHG) Protocol has defined comprehensive carbon accounting protocols to allow for comparable and uniform carbon accounting across a wide range of industries and nations. Carbon emissions are allocated to Scopes 1, 2 or 3 to avoid double counting of emissions.

49PART 2 | CHAPTER 6 | LOOKING AT THE BIGGER PICTURE – MANAGING YOUR TENANCY CARBON EMISSIONS

The GHG Protocol defines direct and indirect emissions as follows:

• Direct GHG emissions are emissions from sources that are owned or controlled by the reporting entity.

• Indirect GHG emissions are emissions that are a consequence of the activities of the reporting entity but occur at sources owned or controlled by another entity.

There are three Scope levels:

• Scope 1: Relates to direct emissions - emissions that you are directly responsible for e.g. the burning of gas, the use of petrol etc.

• Scope 2: Covers indirect emissions (in as much as someone else has burnt the fuel) but specifically linked to you - electricity is the main example.

• Scope 3: Covers all indirect emissions other than Scope 2 (e.g. the energy associated with making the paper that you use, or the fuel that powers the planes you fly and taxis you hire) - and these are perhaps the most difficult to deal with.

When setting the boundaries, Scope 1 and 2 emissions should always be included. Deciding whether to include Scope 3 emissions depends on what you are trying to achieve. If you were reporting under NGERS (National Greenhouse and Energy Reporting) regime you need only account for Scope 1 and Scope 2 emissions. If you want to account for all the carbon associated with your products and services, a comprehensive environmental life cycle assessment will be needed.

In accounting for carbon, it is important to remember that your Scope 2 and 3 emissions will be someone else’s Scope 1 emissions. That said, would the emissions have occurred without demand from you?

A bRIef InTRoDUCTIon To CARbon eMISSIonSGlobal warming is caused by many gases in the atmosphere. The Kyoto Protocol nominates 6 key gases emitted by human activities that signatories to the Protocol must monitor and manage. They are:

• Carbon dioxide (CO2)

• Methane (CH4)

• Nitrous oxide (N2O)

• Hydrofluorocarbons (HFC)

• Perfluorocarbons (PFC)

• Sulphur hexafluoride (SF6)

Each of these gases has a different Global Warming Potential (GWP) being its impact on global warming when compared to CO2. To achieve an aggregate measure of the impact of a process, all of the Kyoto gases emitted are multiplied by their global warming potential and added together to calculate the overall impact. The total impact is described as the process’s CO2 equivalent (CO2-e).

The Global Warming Potential of the Kyoto gases is as follows:

GasChemical formula

GWP Compared with Co2 (Co2-e)

Carbon dioxide CO2 1

Methane CH4 21

Nitrous oxide N2O 310

Hydrofluorocarbons HFC 140 – 11,700

Perfluorocarbons PFC 6,500 – 9,200

Sulphur hexafluoride SF6 23,900

For comprehensive detail please see the Australian Government National Greenhouse Accounts (NGA) Factors July 2012.

(http://www.climatechange.gov.au/publications/greenhouse-acctg/national-greenhouse-factors.aspx)

2012 factors are at http://www.climatechange.gov.au/publications/greenhouse-acctg/national-greenhouse-factors.aspx

50 PART 2 | CHAPTER 6 | LOOKING AT THE BIGGER PICTURE – MANAGING YOUR TENANCY CARBON EMISSIONS

Carbon footprint

The carbon footprint of an organisation is a measurement of the annual total carbon emissions from all sources within defined boundaries, converted to a common metric.

emissions factors

In carbon management, emissions factors are used to assess the amount of CO2-e that will be generated by the combustion of a particular fuel. The make-up of the fuels varies from state to state, and therefore the CO2-e emitted per kilowatt of energy generated also varies. Emissions factors provide a calculation of the weight (kilograms) of the CO2-e pollution caused by the energy generation of a specific weight (tonnes) or volume (kilolitres) of a particular fuel when consumed.

All fuels have different emissions factors.

Typical examples are:

fuelenergy Content factor

emissions factor kg Co2-e/GJ

Co2 Ch4 n2o

Black Coal 27.00 88.20 0.03 0.20

Brown coal 10.20 92.70 0.01 0.40

Natural gas distributed in a pipeline

39.3 x 10-3 51.20 0.10 0.03

Gasoline 34.20 66.70 0.02 0.02

Diesel oil 38.60 69.20 0.10 0.20

Carbon reduction through energy efficiency (assuming we are not using GreenPower)

When we save energy generated from fossil fuel sources we reduce the amount of atmospheric carbon emissions. When 1 kW of power is generated, the amount of atmospheric carbon emitted depends on the process used to generate the power. The CO2-e saved depends on the make-up of the fuel consumed and it varies around the country.

State, Territory or grid descriptionemission factor kg Co2-e/kWh

New South Wales and Australian Capital Territory

0.88

Victoria 1.19

Queensland 0.86

South Australia 0.65

South West Interconnected System in Western Australia

0.82

Tasmania 0.26

Northern Territory 0.71

Indirect (Scope 2) emission factors for consumption of purchased electricity from the grid

Source: NGA Factors 2012


Measuring a carbon footprint

Calculating a carbon footprint is a matter of establishing and measuring the total amount of CO2-e generated for the particular activities, products and processes of an organisation for a year.

The activities included in the establishment of a carbon footprint will depend on what an organisation chooses to include within their nominated boundaries. Generally Scope 1 and Scope 2 emissions are included. Scope 3 emissions range from easy to assess to very hard to assess. They can also be described as:

• up-stream emissions – emissions produced in a service or product you receive, and

• down-stream emissions – emissions caused by the products or services from your company as they pass through their life and are disposed of, recycled or sent to waste.

Boundaries set the limit of what is included and what is left out of a carbon footprint, usually in regard to Scope 3 indirect emissions. Boundaries can be defined by activities and consumption of energy, materials and products by a business located in a physical location, such as a building or tenancy.

For example:

The direct and indirect emissions for a professional office situated within a commercial office building which make up the carbon footprint of the office would include:

Scope 1 emissions

• Fuel used in company owned vehicles and gas used for cooking in the office

Scope 2 indirect emissions

• Electricity consumed in the office premises

Scope 3 indirect emissions

• Staff travel on business

- Air travel

- Taxi travel

• Consumables

- Paper

- Stationery

• Waste produced

- Paper and paperboard

• Base Building Energy.

- The tenant’s share of the energy (all sources – electricity, gas, oil etc.) consumed by the base building. This could be done pro-rata by the net lettable area of the tenancy against the net lettable area of the whole building.

The emissions factors for the majority of sources can be found at http://www.comlaw.gov.au/Details/F2012C00472/Download

This is the latest version of the National Greenhouse and Energy Reporting (Measurement) Determination 2008 as amended to 1 July 2012.

Carbon measurement of a typical 1000 m2 tenancy

Here is an example of a carbon footprint calculation for an office of 1000 m2 with 70 staff. The calculation used the emissions from the various activities and consumables to calculate an overall footprint for the business premises and operations.

The boundaries chosen for Scope 3 emissions are typical for an office, they can be increased for a more complete calculation.

Following the completion of the carbon calculation, action can be taken to track and reduce the carbon footprint. The total carbon emitted could be offset so that the company can be carbon neutral.


The example is as follows:

emissions Source ConsumptionConsumption Unit

Tonnes Co2-eProportion of Total Inventory (%)

Direct Emissions – Scope 1

Fuel for Company Fleet 11.70 kl 26.91 5.41%

Refrigerant leakage 1.50 kg 2.55 0.51%

Closing balance 29.46 5.92%

Direct Emissions – Scope 2

Purchased electricity for leased area

215465 kWh 191.95 38.60%


Optional Indirect Emissions – Scope 3

Electricity purchased for office base building

78552.22 kWh 135.95 27.34%

Staff commuting to work 51.18 10.29%

Business travel - aviation 207 trips 37.58 7.56%

Indirect emissions from company vehicles

12 kl 2.34 0.47%

Indirect emissions from purchased electricity

215465 kWh 36.63 7.37%

Business travel – taxi 36730 km 6.54 1.32%

Contingent events 0.00 0.00%

Paper and paperboard waste 2.27 tonnes 5.67 1.14%


net emissions 497.30 100.00%

In the table above almost 73% of the company’s carbon footprint came from the energy it consumed within their tenancy (38.6%), as a tenant in a commercial building (27.24% – their share of the base building energy) and from indirect emissions from purchased electricity (7.37%).

Please note:

Great care must be taken when disclosing or promoting the carbon footprint of a business or activity. The calculation of the footprint based on disclosed boundaries and the offsetting process must be accurate or it might be seen to be fraudulent.

We recommend using the British Standards document PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services, and its partner document Guide to PAS 2050 – How to assess the carbon footprint of goods and services.

If you are interested in taking your study of carbon management further you could attend a course such as the Certificate IV in Carbon Management provided by Carbon Training International (www.co2ti.com).


Reducing your carbon footprint

You have measured your carbon footprint. You can now set about managing and reducing it, and be able to see the results of your work.

The object of good management is to carry out your plan without prejudicing other aspects of your business.

One method is to prepare a Carbon Management Response Plan – CMRP. The CMRP is a plan that outlines the reduction which needs to be achieved, by whom and by when. This can be a complex system and is generally more suitable for larger organisations, or those smaller ones where carbon efficiency is a significant driver of their business.

For smaller SMEs a simpler approach is to review the areas where you can make reductions without impacting the business.

As we have seen in the chapter on energy management, the choice of premises and equipment will have a large impact on energy use and therefore carbon footprint. We have seen that up to 20% or more of tenancy energy can be saved by operating a tenancy efficiently; in the example above this could equate to 8.6% or more of their carbon footprint. Choosing a building with a NABERS Energy rating of 4.5, as opposed to 2.5, will reduce the carbon emissions associated with the energy consumed by the base building by 30% .

Choosing a tenancy with an NLPD of 7 W/m2, as opposed to 18 W/m2 could reduce the total carbon footprint in the above example by 5% (in tenancies without supplementary air conditioning, where lighting power consumption is proportionally higher, the reduction could be closer to 10%).


Therefore the most significant way for many companies to reduce their carbon footprint is to improve energy efficiency, lease space in buildings with a high NABERS Office Energy rating and ensure that the space they are leasing has a low NLPD.

Using the previous example tenancy, staff travel is another area responsible for a large proportion of the company’s carbon footprint. By choosing a location close to public transport so that private cars are not required for the commute to work, the carbon footprint of staff travel will be reduced. The average difference between the carbon footprint for say a 9 km car journey each way in an energy efficient car, and a journey by bus, would be 98.23% (which equates to a 10.1% saving in the total carbon footprint).

In the example business, aviation travel was 7.56% of the company’s carbon footprint. This can be reduced through the use of video conferencing for business meetings. Where travel is necessary and unavoidable, business trips can be arranged so that several meetings are arranged for one trip, or a circuit of linked trips is arranged.

Fuel for the company fleet contributed 5.41% of the carbon footprint. Company fleets can be reduced and the efficiency of having cars ready for use can be overcome by joining a car share scheme. In car share schemes cars are booked and used only when needed. This reduces the cost of car ownership and the carbon footprint.

Taxi use (1.32%) in this company is high with 36,730 km travelled in taxis in 12 months. This can easily be reduced by the use of public transport and possibly the issuing of public transport tickets by the company.

Green energy

The purchase of green energy reduces the carbon emissions from energy purchased by the company for use in the tenancy.

Green energy can be bought from your electricity provider. You can elect to choose the percentage of green energy. 100% would mean zero emissions from the electrical energy your company purchases. In the above example this would reduce the carbon footprint by 38.6% (Scope 2 emissions only)


Carbon offsetting

Where an organisation has reduced its carbon emissions as far as possible by efficiencies within the current structure, such as energy efficiency initiatives, or where the carbon reduction plan is still being put into place and the company requires to have a zero or low carbon footprint, there is another method of reducing the carbon footprint which is through the purchase of carbon offsets.

A carbon offset is a financial instrument that represents a certain amount of carbon having been offset. Carbon offsets are generally in units of tonnes of carbon dioxide equivalent (CO2-e)

An offset is an action that replaces or prevents carbon dioxide equivalent being generated by an activity in a different location.

Offsets are typically generated from emission reducing projects. Project types include:

• Renewable energy:

- solar thermal

- solar photovoltaic

- wind farms

- biomass energy

- hydroelectric dams

• �Energy efficiency projects, eg.

- Energy reduction in commercial property

• Destruction of industrial pollutants or agricultural by-products

• Destruction of landfill or coal seam methane, eg.

- Flaring methane

• Forestry projects including avoided deforestation

• Sequestration by storing carbon in the ground.

There are two carbon markets:

• A compliance market where companies, governments or others buy carbon offsets to meet their carbon emissions caps. The caps are generally imposed by government.

• A voluntary market where carbon offsets can be purchased to reduce the organisation’s carbon footprint caused by electricity consumption, flights, transportation, consumables, etc.

The Carbon offset calculation

The total carbon to be offset will normally be based on the total annual carbon emissions, (see example table), multiplied by the percentage the organisation wants to offset. To be a zero carbon organization the total carbon emissions would be offset.

The quantity of carbon dioxide equivalent can then be purchased.

Purchasing and retiring carbon offsets

When the offsets are purchased they also need to be retired, so that they cannot be sold again. They can be bought, purchased and retired at the same time

The retirement of the carbon offsets are registered at organisations such as NYSE Blue (Verified Carbon Standard) VCS Registry where the Voluntary Carbon Units (VCUs) are issued in accordance to Voluntary Carbon Standard (VCS) protocols. The VCS protocols prescribe a rigorous carbon offset project registration and verification process used to ensure the originating offset project contributes to real and additional emission reductions. The issuance and ownership of these VCUs is tracked in VCS Registries using unique serial numbers to prevent double counting or double selling.

The VCS also sets the standard by which GHG emission reductions are calculated for projects. Visit the Verified Carbon Standard Association website at http://www.v-c-s.org for more information.


Further InformationABARE End Use Energy Intensity in the Australian Economy, 2009.

Australian Bureau of Meteorology, National Climate Centre, http://www.bom.gov.au/climate/change/aus_cvac.shtml

Australian Bureau of Statistics, www.abs.gov.au, ABS Population Projections, http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/1301.0~2012~Main%20Features~Population%20projections~48

Australian Bureau of Statistics, Year Book Australia 2004 (updated December, 2006): ‘Australian coastal population’, http://www.abs.gov.au/ausstats/[email protected]/Previousproducts/1301.0Feature%20Article32004?opendocument

Australia’s Fifth National Communication on Climate Change, Written December 2009, Copyright 2010. A report under the United Nations Framework Convention on Climate Change 2010, http://www.climatechange.gov.au/~/media/publications/international/Australia-fifth-national-communication.pdf

Climate Change in Australia, CSIRO and Bureau of Meteorology Technical Report, 2007, www.climatechangeaustralia.gov.au

State of the Climate, 2012. 2nd Paper produced by the CSIRO and the Australian Bureau of Meteorology. http://www.csiro.au/State-of-the-Climate-2012.aspx/Outcomes/Climate/Understanding

Australian Government: Securing A Clean Energy Future, http://www.cleanenergyfuture.gov.au/why-we-need-to-act/, http://www.cleanenergyfuture.gov.au/clean-energy-future/securing-a-clean-energy-future/#content03

Garnaut Review 2011, http://www.garnautreview.org.au/update-2011/garnaut-review-2011/chapter12.html

NABERS, Energy Management Guide for Tenants

NSW Government: Department of Environment and Heritage, Sustainable Property Guide, http://www.environment.nsw.gov.au/resources/sustainbus/09129SPGSection1.pdf,

Section 1.3 “Climate change, global warming and the built environment”,

Section 2 “Becoming a Sustainable Organisation”,

Section 3.8 “Managing Indoor Environment Quality”.

The Intergovernmental Panel on Climate Change, Fourth Assessment Report, 2007. IPCC2007a, IPCC2007b, http://www.ipcc.ch/publications_and_data/publications_and_data_reports.shtml#1

World Economic Forum, Global Risks Report, http://www.weforum.org/issues/global-risks

United Nations, World Population Prospects, 2010 Revision, http://esa.un.org/unpd/wpp/index.htm

Energy Prices to Rise, Institute of Sustainable Futures, UTS (2011) NSW Business Energy Prices to 2020.

Leasing Lifecycle Tool, Better Buildings Partnership. http://sydneybetterbuildings.com.au/leasing

Template Site Selection Briefs, Better Buildings Partnership

Why Choose High-Performing Buildings?, CitySwitch

Better Buildings Partnership Template Best Practice Lease Schedule

Green Lease Handbook, COAG National Strategy on Energy Efficiency

Negotiating Green Leases - Case Studies, COAG National Strategy on Energy Efficiency

Principles of Best Practice Leasing, CitySwitch and DCCEE

Appendices - ChecklistsThe following Checklists might be useful tools when reviewing tenancies for lease:

• Appendix A – What to look for in a tenancy

• Appendix B – Inspecting the Premises

• Appendix C – Possible ‘deal breakers’

57FURTHER INFORMATION | APPENDICES - CHECKLISTS

Checklist – What to look for in a Tenancy (To help you create a tenancy brief and in decision making)

Appendix

A

Tenancy Address… notes

Total Occupancy Costs

Rent and annual rent increases

Outgoings

Incentives

Fit out and relocation costs

Tenancy energy costs

Out of hours air conditioning

Car parking

Make good at lease end

Professional fees

Car parking costs

Location

Rent range in different areas

Ease of transport for staff

Proximity to public transport that suits the staff

Proximity to clients

Proximity to amenities

Size range

58 APPENDICES - CHECKLISTS | APPENDIX A


Open plan working

Computer room

Number of staff that ‘need’ office space and offices

The use of modern work place practices including Activity Based Working

Number of boardroom and meeting rooms, break out areas and other ancillary uses required for your business needs

Base Building Energy Efficiency

Minimum NABERS base building Energy Efficiency. Say, not less than a NABERS energy rating of 4.5 stars.

Tenancy Lighting Energy Efficiency

Maximum NLPD for the tenancy area, say 7 W/sqm

other base building Requirements

Parking availability

Bike racks, showers and lockers (end of trip facilities)

Green Star Interiors rating points available from the base building

Natural light and outlook

Is a green lease available?

Which PCA Grade of building would you like to occupy?

The Grades for new buildings are Premium, Grade A and Grade B

For existing buildings they are Premium and Grades A to D

Open plan working

Computer room

59APPENDICES - CHECKLISTS | APPENDIX A

Checklist – Inspecting the Premises (Including questions to ask)

Appendix

B


Management

Is management environmentally conscious and focussed?

Is the building being managed and maintained to optimise energy efficiency?

Does the rent include a portion of the base building outgoings?

Cost of after-hours air conditioning

Proposed upgrade Works

Lift upgrades

Lobby upgrades

Services upgrades or air conditioning works

Information to be provided

Floor area

Net lettable area

Rent & outgoings

PCA Grade of the Building

BEEC (Building Energy Efficiency Certificate) containing:

• Base Building or Whole of Building NABERS rating, and

• Nominal Lighting Power Density NLPD for the tenancy area lighting

60 APPENDICES - CHECKLISTS | APPENDIX B


Energy efficient tenancy lighting system and controls

Lighting quality and energy consumption

Look for an NLPD of less than 7 Watts/square metre

Can lighting be switched in smaller zones?

Are tenant light and power metered separately?

Mechanical - supplementary air conditioning

Is tenant condenser water available and if so what capacity?

Presentation and Impact

Lobby and entry presence

Lift quality

Standards of maintenance and cleaning

In the Tenancy:

Finishes

Ceiling quality

Toilets - finishes and fittings

Accessibility and provisions for universal access

Quality of finishes - carpet, walls and lift lobby

Daylight and views

Good levels of natural light that can be enjoyed by the majority of your staff

Good views with the ability to see activities and movement, rather than the back sides of adjoining buildings

Check for dark areas and depth from the windows to the central “core” area

West facing windows, they can be hot in the afternoons

61APPENDICES - CHECKLISTS | APPENDIX B


Are blinds fitted to control solar gain and glare?

What other environmental efficiencies are provided?

List your requirements

Add your own specific criteria for the tenancy area

In the base building:

Is the base building lighting upgraded to best available technology throughout the building, fire stairs, carparks, etc

Improved after-hours air conditioning control

Separate monitoring and cost apportioning of after-hours air conditioning (for buildings with multiple tenancies)

Add your own specific criteria for the base building

Any other Criteria

62 APPENDICES - CHECKLISTS | APPENDIX B

Appendix

C

Checklist – Possible Deal Breakers (Examples of minimum requirements – Create your own list)

building Address… notes

NABERS Office Energy Base Building Rating of not less than 4.5 stars,

Tenancy Lighting Energy Efficiency (NLPD) of not more than 7 Watts per square metre

Views that show open space accessible from two thirds of the floor area

PCA Office Building Grade B as a minimum

Minimum NLA/floor plate m2

Bike and jogging facilities/showers/lockers to Green Star standards, ie 5% of building population accommodated by showers, lockers and secure bike storage.

Good quality toilets

Location, say 10 minutes walk from train station

Location, say 2 minutes from bus stop.

Location, close to staff amenities (restaurants, shops etc)

23 Green Star Interiors Credit Points available from the base building

Good quality and reliable building services

Flexibility – ability to expand or contract in the building

Any other deal breakers

63APPENDICES - CHECKLISTS | APPENDIX C

Advancing standards in land, property and construction.

RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.

In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.

Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.

RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society.

RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.

Real Estate

Managing Energy Efficient Space