Transactional Agents Toolkit

Key Messages

Key Messages of the Sustainability Transactional Toolkit include:

Increasing demand for more sustainable buildings
Sustainability can be a powerful marketing tool
Consider costs over the lease period
Raise the subject of sustainability early
Operational performance is more important than design

Parties Involved

Key Messages

Key Messages

Information & Actions

Increasing demand for more sustainable buildings

Tenants are growing more and more concerned about the environmental and social impacts of their business operations. The drivers for this include corporate social responsibility, employee productivity, attracting the best employees, limiting risk exposure to the continued growth of environmental legislation and basic cost reduction. Sustainable buildings help support them in delivering on sustainability commitments and policies.Tenants are also increasingly focused on their total property occupancy costs. This goes beyond rent and rates and includes service charges, utility costs and productivity impacts. They need clear guidance on how two otherwise similar buildings might differ from one another in these regards.

Owners, with a growing demand from tenants and shareholders reduce environmental impacts, are increasingly recognising that building which have higher sustainability credentials obtain better rents and better sale values as a result. On the downside, failure to meet what are increasingly market norms may have an adverse effect on the time a property takes to let, the lease lengths achieved and the propensity of tenants to renew.

Investors and fund managers are becoming increasingly interested in the sustainability performance of property funds in which they invest. The growth in environmental legislation presents a clear risk and requires owners to both understand and take responsibility for the environmental performance of their buildings.

Many organisations now have aspirations or requirements relating to the environmental performance of the buildings they own and/or occupy e.g. minimum NABERS or Green Star ratings, or corporate targets for reducing adverse environmental impacts. Understanding how these objectives impact on an organisation’s property decisions will help a leasing agent provide a better, more differentiated, service to its clients.

Sustainability can be a powerful marketing tool

New buildings and buildings which have undergone refurbishment often have a number of identifiable design and operational features to provide for their efficient operation. Typically, sustainability characteristics are not heavily promoted in marketing material, but can be an important driver in attracting tenants and should not be overlooked.

Consider costs over the lease period

Sustainable buildings will have lower operational costs for a tenant over the length of a lease period and should, therefore, be more attractive. An agent should be able to effectively advise on the benefits of the measures implemented on a specific building, while also being able to understand and allay any fears a tenant may have about taking space in a building which uses new or innovative technologies.

Raise the subject of sustainability early

It is often the case that both owners and tenants have sustainability aspirations, but these are not discussed until a deal is negotiated and maybe even after fit-out has taken place. Raising the issue of sustainability performance early in the leasing process will allow both parties to identify opportunities to work together and further support each other’s goals/aspirations.

Operational performance is more important than design

While it is possible to achieve significant improvements in the sustainability of a building through design and specification even during a refurbishment or retrofit, the full benefit of these investments will only be realised through the effective management of the building in use. Understanding how environmental performance is implemented through the building management process will be important to any tenant.

Transactional Agents Toolkit

Key Messages

Parties Involved

Key Messages

Information & Actions

Increasing demand for more sustainable buildings

Sustainability can be a powerful marketing tool

Consider costs over the lease period

Raise the subject of sustainability early

Operational performance is more important than design

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