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Australia/NZ real estate tops GRESB global rankings for eighth consecutive year

For the eighth consecutive year, Australia and New Zealand’s real estate market has been ranked the world’s number one for sustainability in the internationally recognised 2018 GRESB real estate results.

GRESB is the global benchmark for environmental, social and governance (ESG) performance of real assets, defining and measuring standards for sustainability performance.

In 2018, GRESB assessed 903 real estate companies, funds and developers across 64 countries, comprising more than 79,000 assets worth in excess of $4.9 trillion.

This year the Australia/New Zealand region recorded its highest score of 76, compared with 73 in 2017. The global average was 68, increasing from 65 in 2017 – indicative of our continued world leadership, but also the increasing international recognition of the importance of sustainability reporting.

A record 73 Australian and New Zealand companies reported to GRESB this year, representing a property portfolio worth more than $447 billion.

GRESB results also showed 60 per cent of the region’s property companies and funds promote tenant health and wellbeing via their buildings and services, compared to just 24 per cent globally.

Green Building Council of Australia (GBCA) CEO Romilly Madew said the Australia/New Zealand region’s “momentous achievement” in recording its eighth consecutive number one global ranking illustrated an ever-increasing understanding that sustainability was central to business reputation and reward.

“Voluntary, independently assessed green building certification programs like our Green Star ratings are supporting and driving market transformation here and around the world,” Ms Madew said.

“They are vital standards in helping investors understand and measure the metrics across the full spectrum of environmental, social and economic sustainability measures, increasingly influencing the value of buildings.

“As market support for sustainability continues to grow, so too does the number of Green Star-rated buildings, fit-outs and communities certified by the GBCA, which is fast approaching 2,000.

“GRESB is vital in driving the move towards a more sustainable built environment, allowing companies to understand where they stand regionally and globally, setting benchmarks for them to aspire to.

“Its provision of standardised and reliable data helps guide investor decision-making and promotes best practice, ensuring the market strives to meet the highest possible sustainability standards.”

GRESB Head of Asia Pacific Ruben Langbroek said the region was responding decisively to new sustainability challenges facing the sector, with more real estate companies and funds setting internal targets for net zero carbon emissions than in other regions.

“The new data paints a picture of a region not only further raising the bar on sustainability performance, but also paving a clear path for others to follow,” Mr Langbroek said.

“Industry stakeholder collaboration and ambitious target setting are driving the region’s leadership.

“To illustrate, the sector has explicitly acknowledged the importance of the Carbon Positive Roadmap for buildings that was released by the Green Building Council of Australia (GBCA) earlier this year, which aims to ensure Australia’s competitiveness and attractiveness for investments while fulfilling international commitments to reducing carbon emissions.

“In addition, regional leaders have expressed their commitment to contribute to the Sustainable Development Goals, implement the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and are increasingly focusing their attention on social sustainability.

“The latter has resulted in more awareness on material social topics such as modern slavery, health and well-being, and community impact.”

For the fourth time, Lendlease’s Australian Prime Property Fund Commercial was ranked number one of the 903 companies and funds globally.

In addition, Lendlease One International Towers Sydney Trust was named the most sustainable global development fund and its Australian Prime Property Fund Retail the world’s most sustainable retail development fund.

Josh McHutchison, Managing Director of Lendlease Investment Management Australia, said the company put sustainability at the centre of its approach to business.

“For investment management, this approach puts investors and customers at the heart of our vision to create the best places,” he said.

“Globally, we are seeing investors increasingly apply environmental and social performance measures to their investment decisions, not only to be good corporate citizens but as an indicator of delivering long-term risk-adjusted returns.”

Stockland was named global leader for listed companies for the diversified office and retail sector and continues to innovate its sustainability approach, owning and operating the highest number of Green Star (Design and As Built) rated retail town centres in Australia.

Managing Director and CEO Mark Steinert said Stockland took pride in its GRESB rating.

“Our approach to sustainability leadership is holistic, focusing on delivering shared value across economic, social and environmental objectives,” he said.

“Since 2006 we have halved our carbon intensity and committed to further reductions by 2020. We have also invested $30 million in 16.4 MW of solar power being rolled out across 16 retail town centres and saved over $90 million through energy efficiency innovations.

“Not only are these initiatives improving the environment, but they are also delivering a 10%+ return for the business.”

Frasers Property was ranked number one for Global Developer Residential and third in the Global Diversified Office Industrial category for non-listed funds.

This year the company achieved an Australian first, receiving a 6 Star Green Star – Design and As Built rating for its Ceva Logistics supersite, located in Melbourne.

CEO Rod Fehring described the results as an “incredible achievement”.

“We are a major global player that is changing the property landscapes where we operate in a very positive way,” he said.

“These accolades further reinforce the difference we are making in our communities.”

The Dexus Office Trust was ranked the leading Australian listed office entity and Dexus Wholesale Property Fund named the leading Australian non-listed diversified office/retail entity.

“We are committed to delivering world-class, sustainable properties and are pleased to have been recognised by GRESB once again for our continued sustainability leadership,” said Dexus CEO Darren Steinberg.

Head of Group Sustainability and Energy Paul Wall said Dexus had continually delivered on its sustainability targets, and recently set a new target to reduce emissions to zero by 2030 through its New energy, New opportunities strategy.

“Our focus will be to drive business benefits within our own operations in preference to purchasing carbon offsets. We aim to halve our electricity consumption by 2030 by identifying and implementing the best technologies and leveraging new energy opportunities through renewables, creating sustained value for our customers,” Mr Wall said.

GRESB’s global and regional sector leaders for Australia/NZ are:

Global sector leaders

  • Industrial – Listed: Frasers Property Logistics and Industrial Trust
  • Diversified – Office/Retail – Listed: Stockland
  • Developer – Non-Listed: Lendlease One International Towers Sydney Trust, Lendlease

Global and regional sector leaders

  • Retail – Non-Listed: Australian Prime Property Fund Retail, Lendlease
  • Office – Non-Listed: Australian Prime Property Fund Commercial, Lendlease

Regional sector leaders

  • Industrial – Non-Listed: Goodman Australia Industrial Partnership, Goodman Group
  • Diversified – Office/Retail – Non-Listed: Dexus Wholesale Property Fund, Dexus

* The reason why some global sector leaders are not also regional sector leaders is because sector leaders are only appointed if there are at least six entities in the specific sector.

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