CEFC invests $100m in AMP Capital Property Fund targeting net zero emissions by 2030
8 March 2017
Landmark energy efficient buildings in the heart of Sydney and Melbourne are the centrepieces of a $100 million investment by the Clean Energy Finance Corporation (CEFC) in the AMP Capital Wholesale Office Fund (AWOF), which is aiming to deliver a property portfolio of net zero carbon emission buildings by 2030.
The CEFC investment in the $4.7 billion AMP Capital fund will help accelerate the development of world-leading energy efficient commercial property portfolios in Australia, according to CEFC Investment Funds lead Rory Lonergan.
"There is enormous opportunity to reduce emissions from buildings and to really push the boundaries of energy efficiency in the property sector," Mr Lonergan said.
"With this investment, the CEFC is pleased to support AMP Capital in its objective to deliver net zero emissions across the commercial property portfolio. This really sets a new benchmark for the commercial property sector in Australia."
As part the CEFC's investment, AMP Capital will target a range of energy efficiency commitments across the AWOF portfolio. The centrepiece is the redevelopment of the existing 50 Bridge Street property in Sydney, as well as Quay Quarter Tower and the wider Quay Quarter Sydney precinct incorporating the neighbouring Loftus and Young Streets mixed use development.
AWOF's portfolio includes other landmark properties such as 200 George Street, Sydney and Melbourne's Collins Place and 700 Bourke Street. The 700 Bourke Street property is only the fourth in Australia to achieve the 6 Green Star performance rating from the Green Building Council of Australia, indicating world's best practice operational performance.
AWOF Fund Manager, Nick McGrath said: "We are really pleased to welcome CEFC as an investor in AWOF, which attracted over $700 million in equity investment in 2016. With a portfolio of 12 premium properties, AWOF is well positioned to deliver sustainability outcomes for investors such as CEFC.
"Having achieved the 6 Green Star Performance rating for 700 Bourke Street, AMP Capital is now focusing on achieving Green Star Performance ratings for all other wholly-owned assets in 2017."
Sustainability is a key component of being an attractive investment vehicle, according to Chris Nunn, AMP Capital Head of Sustainability, Real Estate.
"Responsible investors are increasingly looking for demonstrably green assets, which deliver investment returns while minimising risk. Our customers also demand high sustainability standards that support their wellbeing, align with their values and minimise operating costs," Mr Nunn said.
"We pride ourselves on having a holistic sustainability strategy with ambitious long term emissions reduction targets for our real estate assets, which in turn will influence our supply chain and benefit the broader community."
The CEFC's AWOF investment is another example of its focus on delivering clean energy solutions in Australian cities, as part of its Sustainable Cities Investment Program.
Under its investment agreement with the CEFC, AWOF will target cutting emissions from its property portfolio to zero in just 13 years, exceeding the goals of the internationally-recognised Science Based Targets program, which aims for a minimum 55 per cent reduction in property sector CO2-e emissions intensity by 2050. AWOF will also aim for a portfolio-wide average NABERS Base Building Energy rating of 5.0 stars by 2020 and 5.5 stars by 2030.
A wide range of technologies can be used to achieve the efficiencies and emissions targets. They may include optimisation of ventilation, air conditioning and heating controls through the building management system, LED lighting, programmed occupant-sensing lighting control systems, installation or procurement of energy sourced from renewable energy systems, energy-efficient façade design and glazing selection, and internal staircases to reduce elevator use.
The CEFC agreement with AMP Capital includes a range of further initiatives consistent with encouraging lower emissions and greater energy efficiency.
The measures include greater knowledge sharing by AWOF across the property sector, wider access to property energy consumption data, publication of practical information on the implementation of science-based targets and sharing of information on regulatory and planning barriers to energy efficiency.
Mr Lonergan added: "The positive impacts of this investment and AMP Capital's commitments will spread well beyond the AWOF portfolio, providing a clean energy model for other major property developments.
"We are pleased to see that AMP Capital has also committed to increase its focus on energy consumption at the tenancy level, by engaging with and encouraging tenants to achieve NABERS ratings at the same time as AMP Capital achieves the Base Building Ratings, and seeking to negotiate green lease clauses with mutual NABERS performance targets.
"Through this collaboration with AMP Capital, we will also be able to provide access to a sophisticated institutional client base to assist emerging Australian energy efficiency technology developers that are already being supported by the CEFC."
CEFC Property lead Chris Wade added: "Our focus in the property sector is to deliver both debt and equity financing solutions to drive exemplar energy efficiency and clean energy standards across a range of commercial and residential properties.
"The CEFC's commitment to AWOF is a significant development in its property-related investment strategy, following major commitments to support leading edge energy efficiency measures in the Investa's 60 Martin Place development in Sydney, and Quintessential's historic 1 Malop Street redevelopment in Geelong," Mr Wade added.
ABOUT AMP CAPITAL
AMP Capital is a specialist investment manager with more than A$165 billion in funds under management as at 31 December 2016 and more than 250 investment professionals. AMP Capital has a heritage and strength in real estate and infrastructure, and specialist expertise in fixed income, equities and multi-asset solutions. It is a subsidiary of AMP Limited, which was established in 1849, and is one of Australia's largest retail and corporate pension providers.
ABOUT SCIENCE BASED TARGETS
The Science Based Targets (SBTs) initiative is a joint initiative of the CDP, UN Global Compact the World Resources Institute (WRI) and the World Wildlife Fund (WWF). SBTs encourage signatories to reduce carbon emissions in line with the level of decarbonisation required to keep global temperature increases below two degrees Celsius when compared with pre-industrial temperatures. Science Based Targets pathways set a minimum global property sector target of a 55 per cent reduction in carbon emission intensity on 2010 levels by 2050. Companies wishing to participate submit a commitment letter to the Science Based Targets approach, develop a target and announce that target.
Media release, 2017