Data drives decision-making: NABERS Sustainable Portfolios Index 2023 reveals top performers
Sixty-four property portfolios – and a quarter of Australia’s office market – now participate in the NABERS Sustainable Portfolio Index.
“Investors and property owners want efficient, resilient and sustainable assets – and the 21% growth in participating portfolios confirms this trend,” says NABERS Director, Carlos Flores.
NABERS, the National Australian Built Environment Rating System, was established in 1998. Since then, NABERS has helped Australia’s property industry save an estimated $1 billion in energy costs and driven down greenhouse gas emissions by more than seven million tonnes.
The NABERS Sustainable Portfolios Index (SPI), now in its fifth year, offers the only publicly available, whole-of-portfolio view of actual performance of Australia’s offices and retail assets.
The 2023 Index captured 64 office and shopping centre portfolios, up from 53 in 2022. Two new companies joined the Index in 2023, Mirvac and Elanor Investments, taking the total companies participating to 27.
The SPI Office Energy Index now includes ratings on 418 assets, amounting to 8.56 million sqm of rated area, or 27% of the national office market. The SPI Office Water Index follows closely behind, with 385 assets representing 8.22 million sqm of rated area, or 26% of the total national office market.
The number of funds disclosing in the SPI Indoor Environment index performance grew by 38%, with eight new funds listed. While two new funds disclosed their NABERS Waste ratings, driving a 20% increase in the Waste Index.
“The number of portfolios disclosing their ratings is important – as it not only confirms the clear trajectory of industry leadership, but also strengthens the value of the NABERS SPI,” Mr Flores notes.
“We know data drives good decision-making. The SPI provides business intelligence that enables property owners to compare their portfolios against their peers.”
Charter Hall, for instance, added four new office portfolios to the Index in 2023 – and now has a record 12 portfolios listed for this sector. The total portfolio area Charter Hall now assesses is a massive 1.46 million sqm of space.
“Charter Hall uses independent rating tools like NABERS to verify performance and to focus on continuous improvement,” says Group Head of ESG, Andrew Cole.
“Participation in the NABERS Sustainable Portfolio Index helps us to leverage the Group’s platform-wide scale to share insights and replicate best practice. Across our retail portfolio we’ve been able to scale onsite solar and battery storage to achieve operational efficiency, create cost savings and deliver on our decarbonisation efforts.
“We continue to drive improvements across the business, and third party verification such as the NABERS Sustainable Portfolio Index supports our ongoing monitoring and disclosure of our ESG performance. It also enables our participation in emerging sustainable finance, where we have $3.4 billion in sustainable finance transactions currently.”
Key highlights: Office
Lendlease’s Barangaroo International Tower portfolio of five assets covering just under 271,000 sqm ranked first for energy and water, with a result of 6 stars. This was the first time an average 6-star NABERS Energy rating was awarded across 100% of a portfolio.
Brookfield Property Partners leads the pack for NABERS Indoor Environment, with 5.8 stars across 100% of its almost 147,000 sqm portfolio. This consolidates Brookfield Property Partners’ leading 5.7 star rating in 2022 and demonstrates a commitment to continuous improvement.
Cbus Property consolidated its leading position in NABERS Waste rankings, achieving a portfolio rating of 4.1 stars across almost 219,000 sqm of space – an impressive gain on the 3.8 stars achieved in 2022.
Lendlease’s Barangaroo International Towers portfolio of five assets covering just under 271,000 sqm ranked first for energy and water, with a result of 6 stars. This was the first time an average 6-star NABERS Energy rating was awarded across 100% of a portfolio.
Key highlights: Shopping centres
The Index tracked growth in ambition and action in just one year, with four funds performing above 5 stars NABERS Energy, all with 100% coverage, compared with just one portfolio in 2022.
Charter Hall’s Prime Retail Fund took the top spot for NABERS Energy ratings, with an average of 5.6 stars across the portfolio. Charter Hall’s Prime Retail Fund and Active Super tied in the race for the highest average NABERS Water rating, with both achieving 4.6 stars and 100% coverage.
Active Super’s Local Government Property Fund achieved 100% Carbon Neutral status for its portfolio of retail and office assets.
Measuring what matters
NABERS continues to strengthen the Sustainable Portfolios Index in close consultation with participants, says NABERS Head of Market Development, Magali Wardle.
“We are now including the weighted area for portfolios to allow for better comparison, and we’ve streamlined our processes so we can share our results sooner.”
The NABERS team continues to collaborate with the property and financial industries to unlock high-quality sustainable finance instruments. The NABERS Sustainable Finance Criteria, released in 2022, helps banks, non-bank lenders and investors to structure sustainable finance transactions using NABERS ratings.
NABERS Energy star ratings with GreenPower are no longer included, as GreenPower is being recognised through the introduction of the Renewable Energy Indicator, which will also improve transparency, Ms Wardle adds.
“As Australia shifts to renewable energy, NABERS is responding. The Renewable Energy Indicator recognises and rewards the uptake of renewables and our customers’ contributions towards net zero.
“NABERS’ mantra has always been that measurement leads to better management. Offices rated with NABERS Energy, for instance, have reduced energy consumption by 44% over the last 14 years, and greenhouse gas emissions intensity by 54%.
“The NABERS SPI’s year-on-year improvements confirms that Australia’s leading property owners are stepping up to tackle climate change, address waste and water consumption, and to create better indoor environments for building occupants.”
Check out this year's NABERS Sustainable Portfolio Index 2023.