Readers Digest building upgrade is a landmark for energy efficiency
11 June 2015
The landmark Readers Digest building in Sydney's Surry Hills is expecting to book dramatic energy savings with property improvements financed under a $1.2 million Environmental Upgrade Agreement (EUA), co-funded by the Clean Energy Finance Corporation (CEFC).
The three-level commercial office building's major tenant is Cellarmasters, one of the world's largest direct wine marketers, which is set to benefit from improved office conditions as well as reduced energy bills.
CEFC CEO Oliver Yates said the project is targeting lighting and air-conditioning energy savings of more than 60 per cent.
"When complete, this project will demonstrate the tremendous potential for older commercial properties to use innovative EUA finance to make lasting improvements to their energy consumption, delivering ongoing benefits for tenants and owners," Mr Yates said.
"Australia's cities have a large number of B and C grade commercial properties, many of which are well over 20 years old. The owners of these properties have an opportunity with EUAs to make improvements that reduce operating costs, enhance the occupant experience and maintain the value of buildings against newer properties.
"Enhancing the energy efficiency of existing buildings through EUAs is one of the most cost-effective ways for the commercial property sector to reduce ongoing operational expenses and carbon emissions.
"Greener buildings have the benefit of lowering utility bills, which is attracting increasing interest in this EUA program. We hope many others take a leaf out of the Readers Digest Building book to access Environmental Upgrade Agreement finance," Mr Yates added.
Through an agreement with the City of Sydney, Readers Digest building owner Intrasia Oxley (RDB) Pty Ltd is making the energy efficiency improvements. The upgrade is being financed by the National Australia Bank, the CEFC and Eureka Funds Management, through Eureka Environmental Upgrade Finance (Eureka EUF).
The Readers Digest building upgrade works are being delivered by energy efficiency consultants NuGreen Solutions.
Paul Schlaphoff, NuGreen Solutions CEO, said the upgrading to LED technology with smart lighting would replace the old fluorescent lights. A new building management system would allow better management of energy efficiency throughout. In addition, energy efficient chillers would be installed to replace the 1960s chiller and two others servicing the building.
Eureka Funds Management Director Niall McCarthy said Eureka EUF has capital available to lend and is actively seeking to finance further EUAs. "The fund provides environmental upgrade finance that can be repaid over 7 to 10 years, which allows property owners to offset charges with energy savings achieved," Mr McCarthy said.
About Environmental Upgrade Agreements
Environmental Upgrade Agreements (EUAs) are an innovative mechanism for financing upgrades of commercial properties to improve their energy or water efficiency, reduce waste and reduce greenhouse gas emissions. They involve a financing agreement between a building owner, a financier and a local council.
The EUA is secured and tied to the property rather than a property or building owner which allows capital to be accessed at a competitive rate and for a longer term, improving the attractiveness of undertaking energy efficiency upgrades.
The local council agrees to levy environmental upgrade charges along with the rates charges for the land, and passes the repayments on to the finance providers.
State legislation enables councils to levy EUA charges, and legislation is currently in place for the City of Melbourne and participating councils in New South Wales. South Australia's EUA program is known as Building Upgrade Finance.
About Eureka EUF
Eureka Environmental Upgrade Finance (Eureka EUF) provides property owners with finance to make environmental upgrades to their buildings. To learn more about how the finance works visit http://www.eurekaeuf.com.au
About NuGreen Solutions
NuGreen Solutions is a unique Australian based Energy Services Company providing Energy Efficiency Solutions to the built environment. To learn more about how the finance works visit http://www.nugreen.com.au
Media release, 2015