29 March 2018
The CEFC and Lendlease are targeting a new standard of sustainability in large-scale commercial precincts, targeting the delivery of net zero emissions from a $4.5 billion commercial property portfolio as early as 2025.
Commercial developments in the new Melbourne Quarter precinct, in the heart of the city’s CBD, will be among the assets to benefit from the CEFC investment, which will help ensure precinct developments within the portfolio follow best practice energy efficiency programs.
The CEFC is committing up to $100 million in equity to the Australian Prime Property Fund Commercial (APPF Commercial). The Fund is managed by Lendlease and invests in prime commercial properties across Australia. It was rated the world’s most sustainable real estate fund in each of 2014, 2015 and 2017.
CEFC CEO Ian Learmonth said the CEFC investment in APPF Commercial would help set a new benchmark for the investment fund, supporting an accelerated drive towards a net zero carbon property portfolio target by 2025.
The CEFC investment is targeting abatement of more than 40,000 tonnes of carbon emissions over the expected lifetime of the assets in the portfolio.
The net zero carbon goal is well ahead of the Australian Sustainable Built Environment Council recommendation that buildings achieve net zero carbon emissions by 2050 to meet international obligations.
Mr Learmonth said: “Buildings account for nearly a quarter of Australia’s carbon emissions. Lendlease and other industry leaders recognise the need to move towards net zero carbon buildings and we’re working together to identify ways in which that can be achieved as early as possible.
“A key focus of this investment is its ability to demonstrate, through the Melbourne Quarter development, how sustainability and design initiatives integrated across an entire precinct can transform the way we work and live, with zero carbon outcomes.
“This approach delivers emissions savings over and above what could be achieved in a standalone building, by networking and sharing technologies across the buildings and facilities within the development precinct.”
The Melbourne Quarter precinct, opposite Southern Cross Station in the commercial heart of Melbourne, will combine commercial, residential and cultural facilities. APPF Commercial is exploring the potential for innovative virtual network technologies, onsite power generation, heating solutions, battery storage and renewable energy technologies.
Josh McHutchison, Managing Director at Lendlease Investment Management said: “We are delighted to welcome the Clean Energy Finance Corporation as an investor in APPF Commercial.
“The CEFC is a pioneer in supporting businesses in the delivery of innovative technologies that reduce Australia’s carbon emissions. Their purpose is aligned with our sustainability aspirations and targets.
“CEFC’s investment in APPFC forms part of the Fund’s most recent equity raise. We look forward to working with the team at CEFC to implement innovative solutions to achieve our sustainability aspirations and deliver superior outcomes for our tenant community.”
The first stage of the Melbourne Quarter precinct is on track to be completed in 2018. When completed, the precinct will include a third office tower and is expected to accommodate approximately 13,000 workers and 3,000 residents.
CEFC Property Lead Chris Wade said that by financing best practice sustainability initiatives with major property investors such as Lendlease, the CEFC was demonstrating the strong potential for positive long-term sustainability outcomes for the property sector.
“CEFC finance is helped developers forge new standards in sustainability and building design across the built environment. We’ve committed finance to community housing, student accommodation, residential developments, shopping centres, hospital and healthcare facilities and commercial office buildings,” Mr Wade said.
“This investment with Lendlease is another strong example of how clean energy can be used across the built environment to deliver long term economic and environmental benefits. It provides a model for other precinct-scale developments Australia-wide.”
APPF Commercial has 21 assets across NSW, Victoria, Queensland, ACT and South Australia. It is the first Australian fund to be awarded a 6-Star Green Star portfolio performance rating. It is also ranked Number One on the 2017 Global Real Estate Sustainability Benchmark (GRESB) across all sectors and geographies.
Established in 1994, the Australia Prime Property Fund (APPF) Commercial comprises a high-quality portfolio of 21assets. It draws on a research-led investment capability, active asset management, and unique access to Lendlease’s leading office development capability and pipeline to seek to deliver superior risk adjusted core returns. The Fund’s investment strategy is focused on investing in efficient, flexible and sustainable commercial assets. The Fund targets precincts that are expected to benefit from infrastructure, transport, amenity and access to public “green space”.