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PAGE 1 SUSTAINABITY AND REAL ESTATE

Sustainability & Real Estate

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Sustainability & Real Estate

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Page 1: Sustainability & Real Estate

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SUSTAINABITY AND REAL ESTATE

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“It  doesn't  ma3er  if  you  believe  in  global  warming  or  not.  Successful  leaders  must  address  what  is  important  to  occupiers  of  space.  More  efficient  use  of  space,  greater  producFvity  in  be3er  quality  space  and  lower  energy  costs  ma3er  to  all  those  who  fear  obsolescence.”      Source:  The    Journal  of  Sustainable  Real  Estate  

SUSTAINABILITY DRIVERS

•  Resource  Scarcity  •  Cost  Increase    •  Gov.  IncenFves  

•  Market  ExpectaFons  •  Property  ValuaFon  •  Revenue  GeneraFon  

Sustainability  Drivers  

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PROPETY    OWNERS  &  INVESTMENT  MANAGERS  

80%   Are  interested  in  the  sustainability  performance  of  the  properFes  they  invest  in  

84%     Report  that  tenants  are  becoming  more  demanding  in  terms  of  wanFng  sustainable  space    

72%     Have  implemented  formal  sustainability  policies    at  the  fund  level  

68%   Evaluate  the  sustainability  of  an  investment  during  the  acquisiFon  phase    

76%     Feel  there  is  a  value  difference  between  a    sustainable  and  non-­‐sustainable  building    

16%   Evidenced  that  sustainability  directly  contributed  to  a  rental  premium    

SUSTAINABILITY & REAL ESTATE

Source:  Cushman  &  Wakefield.  Property  owners  and  investment  managers  survey  results.  2013    

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SUSTAINABILITY AT A GLANCE

Source:  Adapted  from  Sands  ECO360°  Global  Program    

•  Cost  Savings  

•  Revenue  Increase  

•  Healthier  Bo3om-­‐line  

•  Higher  ValuaFon  

•  Be3er  Corporate  Image      

Successful  ImplementaJon  

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GREEN BUILDINGS

•  Environmental  Leadership  

•  Water  and  Energy  Efficiency    

•  Voluntary  Building  CerFficaFons    

•  Clean  Technologies    

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RESPONSIBLE OPERATIONS

•  Sustainable  Purchasing  Policy  •  Waste  Management  Programs  

•  Efficient  Air  CondiFoning  System  

•  Water  and  Energy  ConservaFon  

 

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STAKEHOLDER ENGAGEMENT

•  Environmental  Reports    

•  Engagement  of  Emlpoyees  

•  Corporate  Social  Responsibility    

•  CollaboraFon  with  Local  Community  

•  Voluntary  CerFficaFons  

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BIG PICTURE: SUSTAINABILITY TREE

Sustainability  

Green  procurement  

Use  of  cerFfied  products  

InnovaFons  

Development  &  RenovaFons  

Environmental  protecFon  

Waste  and  CO2  management  

Stakeholder  engagement  

ReporFng  

OperaFng  efficiency  

Energy  &  Water  efficiency  

AcFon  plan   Benchmarking  

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Determine  objecFves  for  an  asset  /  porholio  

Understand  goals  for  the  exisFng  financial  performance  &  future  value  of  the  investment  

Recommend  acFons  based  on  financial  goals  and  objecFves  for  an  asset  /  porholio    

Align  sustainability  and  with  financial  strategy  

Create  P&L  projecFons  

Implement  a  scope  of  work  for  the  asset/porholio  

Assess  the  results  

APPROACH TO INVESTMENT

Owner’s  ObjecJves  

1  

2  

3  

4  

5  

6  

7  

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SUSTAINABILITY MANAGMENT

.    

Benchmarking    • Define  baseline  parameters  for  facility  performance  • Establish  key  uFlity  metrics  • Compare  with  industry  standards  

AudiJng      • Review  of  facility  performance  (energy,  water,  and  waste)  • IdenFfy  opportuniFes  for  uFlity  cost  savings    • Assessment  of  future  results  (ROI,  NPV,  Payback)  &  recommendaFons    

ImplementaJon  • Modeling,  planning,  project  management,    • Financing,  procurement  

Results  Assessment    • Results  review  • ReporFng  • Adjustments  

(  ON  A  PROPERTY  LEVEL  )  

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SUSTAINBILITY AND PERFORMANCE

To  increase  the  return  for  shareholders    

Strategy   AcFon  plan   Performance  measures   Budget   Employee  

performance    

 Corporate  

level      

 Division    Level      

 Property    Level      

Sustainability  Balance  Scorecard    Strategic  Planning  

Performance    BudgeFng    

Employee    Accountability    

Aligning  financial  goals  with    sustainability  strategy  by  using  

Balanced  Scorecard  and    a  cascading  model  

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Summary  of  Financial  Performance  by  Property  and  Company     Measures  to    

Implement  Annual    Saving    

EsJmated    Project  Costs  

Simple  ROI   IRR   NPV  

No  cost  (operaFonal  adjustment)    

-­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐  

Low  cost  (funding  from  exisFng  operaFonal  budgets)  

-­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐  

CapEx  (external  and  internal  funding)  

-­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐  

Combined  Impact   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐   -­‐-­‐-­‐  

SOURCE:  THE  TABLE  WAS  ADAPTED  FROM  AN  HVS’  PROPERTY  UTILITY  AUDIT  AND  CAPITAL  PLANNING  REPORT    

MEASURING FINANCIAL PERFORMANCE

Goal  EsFmate  an  impact  of  conservaFon  measures  on  operaFonal  profitability  and  overall  financial  performance  

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SUSTAINABILITY GUIDELINES

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MAKE SUSTAINABILITY AN INTEGRAL PART OF THE BUSINESS

14  

Triple  BoYom  Line    

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                   About  the  author:    Vadim  Kostyukhin  graduated  from    Cornell  Hotel  School  with  a  major  in  Real  Estate  Investment  and  Finance  and  from  University  of  Hawaii  at  Manoa  with  an  MBA  in  Management.      A  civil  engineer  by  trade  and  professional  manager,  he  has  been  focusing  on  the  issues  of  sustainability  since  2005.  Currently,  he  is  working  with  Alternaty  Real  Estate,  Vietnam,  as  a  freelance  consultant  and  a  co-­‐founder  of  two  new  businesses.    Contact  informaFon:  [email protected]  Mobile  (Global)  +1  339  674  0454