Sustainable commercial buildings make good business sense. Increasingly, tenants are seeking sustainable premises to help reduce power costs and improve the working environment for their employees.
A comprehensive study of electricity retail bills found that small businesses in South Australia and the ACT were paying 22% more in April 2018 compared with the previous year. NSW prices increased by 15% over the same time. In fact, all Australian states and territories experienced double-digit rises over the year, with the exception of Queensland where prices rose by 4%.
Faced with the stark choice of either passing these rising costs on to customers, at the risk of hurting sales, or absorbing the costs, a report by the Australian Energy Market Commission found over 50% of small businesses were attempting the latter.
The result is that many businesses need to take whatever steps they can to cut power consumption.
Sustainable commercial buildings are therefore a huge drawcard for Australian businesses thanks to the savings, but also thanks to toxin-free, light and airy environments that offer health benefits for staff. Increased worker health and satisfaction leads to greater productivity and staff retention rates. Natural light and fresh circulating air are particularly sought after.
As a commercial property manager, upgrading your building to meet higher environmental standards can be a worthwhile investment. It makes finding and retaining tenants considerably easier. According to the Australian Property Institute, obtaining a 5-Star NABERS Office Energy Rating, results in a 9% increase in resale and tenancy values for office buildings, while those with a Green Star rating achieved a 12% price premium. They also experienced reduced vacancy rates and lower operating costs.
While some commercial property managers may be under the impression that retrofitting existing buildings to meet more stringent green credentials is expensive, there are a number of measures that can be taken which are cost effective and are bound to offer a substantial return on investment.
1. Lighting
With lighting accounting for up to 40% of energy costs in commercial buildings, the installation of energy efficient lights, such as LEDs, will significantly reduce energy consumption and power costs. Recent years have seen the costs of LED light fittings fall substantially, making this an inexpensive investment that can lead to substantial savings.
Installing skylights also reduces energy consumption and the need for artificial lighting. Natural sources of light have a positive impact on staff performance, making skylights particularly desirable for many of your potential tenants.
Tenants can be easily convinced of the benefits of change, with a simple cost calculation comparing existing incandescent bulbs with that of LED bulbs.
Here are the four easy steps:
- Add up the wattage of each incandescent bulb in the tenant’s office (e.g. 20 x 60 watt incandescent bulbs = 1,200 watts)
- Divide this by 1,000 to know the total kilowatts (e.g. 12,000 / 1,000 = 1.2kW)
- Multiply the kilowatts by the number of hours used per day (e.g. 1.2kW x 15 hours = 18 kWh per day)
- Assume a cost of 27 cents per kWh (18 kWh x $0.27 = $4.86 per day)
So, if your tenant is using 20 x 60 watt incandescent bulbs for 15 hours per day, five days per week, it’s costing your tenant $1,263 per annum. Show your tenants that if they switch from incandescent bulbs to LED bulbs, the wattage per bulb would drop to 12 watts. This means the tenant would only spend $252 per annum – a massive 80% saving!
2. Air Conditioning
Heating, ventilation and air conditioning can account for up to half of all energy costs in commercial buildings. So reducing the need for your tenants to use HVAC systems can also result in significant savings.
Cost-effective measures, such as the installation of block-out blinds that prevent the summer sun from penetrating internal spaces, can reduce the time tenants need to have HVAC systems operational. Furthermore, using high-quality insulation in roof spaces and wall cavities will prevent heat from escaping in the cold winter months.
Additional to the cost differential, commercial air conditioning units need to be regularly maintained to ensure staff health. Just some of the ailments staff can experience include:
- Breathing difficulties resulting from bacteria and fungi breeding in air conditioning units, including the potentially fatal Legionnaires disease
- Feelings of fatigue or headaches from temperatures that are set too low, impacting staff productivity
- Contamination from circulating mould and dust as air conditioning units tend to circulate old air rather than bringing in fresh air
- Dry skin and dehydration which can make people more susceptible to colds
- Studies show people who spend more time in air conditioning tend to visit doctors more often with ears-nose-and throat problems, respiratory and dermatological problems
Tenants can reduce these risks to staff health by relying less on air conditioning through sustainable practices. With healthier and more productive staff thanks to block-out blinds and good quality insulation, tenants will be more likely to come on board with your efforts to reduce reliance on HVAC systems.
3. Water
Water usage and heating are expenses that can be reduced by replacing old boilers with new generation technology that heats water on-demand. Ensure thermostats are not set too high, preferably to a temperature of around 60°C.
By implementing flow sensors on taps, so water only runs when an object is under the faucet, as well as flow controllers to reduce the volume of water coming out of taps, substantial savings on water usage can be achieved. All toilets should have dual-flush options, while regular maintenance of pipes to prevent leaks, will also help reduce water consumption.
To get really serious about cutting water consumption, commercial managers can install grey-water systems that collect run-off from drains for use in horticulture and flushing toilets.
One easy way for your tenants to improve their green credentials is through implementing water saving strategies, particularly at a time when large parts of the country are in drought. Luckily, many Australians are well-versed in this, and, with most jurisdictions in Australia offering advice and incentives for business to reduce water consumption it is not hard to get tenants to comply.
4. Improved Metering and Monitoring
Implementing sensors and sub-meters to monitor energy usage means wastage can be identified more precisely and addressed. New building management systems technology can automate shut off times, so equipment is not left running after hours.
The first step to getting your tenants on board with cutting energy consumption, is helping them keep track of their current usage levels. Most major Australian energy providers now supply smart meters which can identify how much energy is being consumed each hour. Additionally, online portals are also available so businesses can easily keep track of their consumption levels, and identify opportunities for reducing their energy usage.
Take time to engage your clients, discuss their energy needs, and help them install smart meters. Then teach them how they can make use of online portals to monitor their consumption rates.
5. Renewable Resources
Solar panels are a great way to power your commercial property. The initial investment can pay for itself in lower power bills, particularly if excess power being generated can be sold back to the grid.
Solar panels are increasingly common as new manufacturing processes lead to more cost-effective production, and the costs of the technology come down. A number of government incentives are in place to encourage the uptake of solar power, including the NSW and Victorian Solar Energy Rebates.
With the cost per kilowatt of solar energy declining, while other retail electricity costs are steadily rising, solar power has become an increasingly attractive option for many Australian businesses.
The major impediment to persuading your tenants to get on board with solar energy, however, is the high perceived cost of installing the panels. However, several energy providers now offer solar panel leasing. With a leasing arrangement, you are effectively letting someone else build a mini power station on the roof of your building, at no or little up-front cost to you.
The company that financed the construction of the system then sells your tenants the power that it generates at a rate that is lower than retail electricity prices. This is potentially a great way to incentivise tenants to get on board with solar power, without them having to commit to the upfront costs of installing all the panels.
6. Recycling and Going Paperless
One area where businesses can reduce their expenses is in commercial rubbish removal. Most local councils charge businesses for rubbish removal based on the volume and frequency of the collection.
According to the NSW Environmental Protection Agency, the average office waste comprises 75% paper and cardboard, 12% food waste, and 6% glass or plastic waste. This means that over 90% of waste is recyclable.
Help your tenants reduce their volumes of rubbish with a recycling program. Furthermore, you can encourage your tenants to go paperless, further reducing their volumes of rubbish, and at the same time helping reduce deforestation.
Start by providing recycling bins. All councils around Australia can assist you with this. When it comes to moving towards a paperless office, consider engaging professional consultants, or business equipment suppliers have a sustainable offering.
Professional consultants can devise specific plans tailored to the needs of your tenants. While many businesses intuitively understand that going paperless will generate efficiencies and save money, knowing what specific steps to take is more complicated.
Specialist consultants can help your tenants set up secure cloud storage to safely file all documents online. This reduces a lot of duplication and saves time when documents need to be found. Consultants can also advise on setting up online accounting systems to enable easier financial controls and tax compliance procedures.
Through engaging specialist consultants and business partners, you will enable your tenants to easily adopt paperless systems and will significantly reduce the quantity of paper waste your building produces.
7. Low-Toxicity Paint
With businesses increasingly focused on ensuring healthy environments for their workers, low toxicity paints are increasingly sought out. Paints typically cover 80% of a building’s surface, with many containing Volatile Organic Compounds (VOCs), that release gasses for up to 5 years after application. These gases can lead to a variety of health issues such as asthma, headaches, nausea and even cancer. Ironically, as buildings have adopted better insulation, these toxins are more likely to be trapped within buildings with no way to escape.
Higgins is committed to the highest environmental standards. We seek to ensure all our practices meet and exceed the expectations of our customers, employees and other stakeholders. Our track-record painting commercial buildings with VOC-free paint, including hospitals, gives us the expertise to ensure your commercial premises will be safe for tenants and the general public.
We have adopted the Enviro Solutions System for example, which enables an environmentally responsible way of managing paint and associated wastes as well as washing out painting tools, such as brushes. This eco-friendly wash system converts waterborne paint washings into clear water and solid waste, allowing for non-toxic disposal.
Next time your building needs painting, why not select a low toxic VOC-free paint. The health benefits of VOC-free paint for tenants’ staff and customers are clear. Furthermore, any disruption to business resulting from the repainting will be kept to a minimum, as staff can get back to work faster, without undue disruptions from toxic fumes.
Many companies have confidence that sustainable business practices will improve their profitability. Property Managers and tenants alike have a lot to gain in supporting practices that contribute to sustainable commercial buildings, so it’s worth working together towards a common goal.
Need to know more about how you can sustainably maintain your property, including improving the longevity of your paintwork? Download our free guide today.
Higgins Coatings is Australia's premier commercial painting contractor with over 70 years of experience in providing cost-effective painting and tailored maintenance solutions to a broad range of industries. If you need quality painting services delivered on time and within budget, contact us today for a consultation.