Recent research shows that, while green buildings might cost more, they attract a premium price ‒ and that’s after taking other factors like location, building height and grade into account.

For example, green buildings with a NABERS rating of 5 and above in Sydney and Melbourne gain up to an 18% premium over non-rated buildings. For up to 4.5 stars, buildings still achieve around 8% of increased value.

In London, price premiums for higher-rated buildings achieve only about a 10% premium, indicating Australia’s lead in the global shift to green.

ESG drives green architecture and operations

For all strata, from company boards to managing directors and investors, environmental, social and governance (ESG) standards prove to be important considerations. Millennials, whether they’re workers or investors, will choose to put their money where their values are. As noted by a property expert, sustainability credentials are proving to have measurable impacts on building values

Towards net zero

Globally, the building and construction sector is responsible for 36% of energy consumption, 38% of energy-related carbon emissions and 50% of resource consumption. In countries across the world, building owners are committing to reducing their energy requirements, reduce related emissions, and lower reliance on fossil fuels. Initiatives should not only help the world lower carbon emissions, but also, enable community benefits.

Getting greener buildings

Sustainability has become an important tool for building owners, who now employ strategies to ensure their buildings’ green credentials.

Across the real estate industry, green initiatives include innovative building materials like ‘green’ concrete such as Hanson Australia’s Green Concrete that reduces CO2 by 45%. Green concrete offers innovations such as substituting concrete with by-products and slag to reduce the overall percentage of cement. New methods can reduce embodied carbon without having an adverse impact on hardening properties. Energy and water efficiency are also key, reducing operational costs, while using recycled materials can lower construction costs.

How green buildings deliver value

Sustainability should be an important consideration for owners for many reasons that include:

• Improved asset value: As investors take a greater interest in ESG, green buildings will be more marketable and hold their value through higher rents and longevity.


• Lower operating costs: Through reduced energy and water consumption, green buildings save owners and tenants while lowering longer-term operations and maintenance costs. In most cases, the energy savings alone have been shown to exceed cost premiums for design and construction and offer a return on investment within a reasonable time frame.


• Improved workplace health and productivity: The move to workplace wellness has accelerated uptake of natural building materials for interiors that can influence occupants’ health and wellbeing for improved productivity and lower worker churn. The result is a better bottom line for organisations.


• Lower risk: As building codes and regulations for sustainability become more stringent, building owners are under increased pressure to comply and make their buildings more efficient. The sustainability of a building can have an impact on a building’s rental value and the capital value, which affects the profitability of the asset and the return on investment.


Can we help with your Mount Gambier commercial property?

Call Herbert Commercial on 08 87 250 500 for a complimentary annual investment portfolio assessment. From this assessment, feedback may warrant the need to seek Herbert Commercial’s advice and expertise with formulating a plan to action restructuring or renegotiating the best lease scenario moving forward. We’re here to help.

As the only dedicated commercial property agency in Mount Gambier, we have a network with and are sought after by national commercial agencies as a trusted extension to their services. Our wealth of commercial knowledge of the Mount Gambier market extends to the broader commercial market, meaning we can ensure you achieve your commercial property goals.