The Australia and New Zealand real estate market has, once again, been named the world’s most sustainable, according to the 2017 GRESB real estate results.
GRESB is the global benchmark for environmental, social and governance (ESG) performance of real assets.
This year, GRESB assessed 850 real estate companies and funds, representing more than 77,000 properties and AUD $4.6 trillion in global assets under management.
The Australia/New Zealand regional score was 73, compared with a global average of 63. Australia continues to lead the world, although the gap with other regions is slowly closing. In 2016, Australia/NZ scored 74, compared with the global average of 60.
A record 66 Australian companies with AUD $205 billion in assets reported to GRESB this year, up from 55 last year.
According to Ruben Langbroek, Head of Asia Pacific at GRESB, this uptake is a direct result of increased investor demand for ESG-related disclosures.
“Transparency on ESG performance of property companies and funds supports investors, such as superannuation funds, to make better informed decisions on where and how to allocate their capital. Importantly, it also enables them to identify material topics for engagement with their investment managers, with the aim of enhancing and protecting shareholder value.
“The results for Australia and New Zealand underline that investor interest, supported by accurate ESG performance benchmarking and building-level certification programs, is empowering the spread of leading practices in sustainability,” Mr Langbroek adds.
“The region’s integrated approach to sustainability supports the industry’s efforts to create healthy working environments, efficient buildings, inclusive communities and resilient cities.”
The Green Building Council of Australia’s (GBCA’s) Chief Executive Officer Romilly Madew says green building certification programs, like Green Star and NABERS, are now institutionalised in mature real estate markets like Australia.
The GBCA has certified more than 1,700 Green Star-rated buildings, fit outs and communities.
“Disclosure and transparency continue to drive the market in Australia, influenced by a host of factors from the Paris Agreement targets and Sustainable Development Goals, to disclosure requirements through the stock exchange and the Green Building Council of Australia’s zero carbon agenda,” Ms Madew says.
“Australia continues to be recognised globally for its high level of transparency, collaboration and knowledge-sharing, as well as its accountability for sustainability at the highest levels.
“GRESB can help investors understand important non-financial metrics that are influencing the value of buildings across global markets. Leading companies understand this, which is why 20 per cent more Australian companies are now reporting to GRESB than a year ago.”
Lendlease’s Australian Prime Property Fund Commercial was ranked number one of all 850 companies and funds globally. This is the third time Lendlease’s fund has claimed the top spot, having achieved the same result in 2015 and 2014.
In addition, Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust were jointly named the most sustainable development funds globally, and the Asian Retail Investment Fund 1 recognised as the regional leader for the retail sector in Asia. The Australian Prime Property Fund Retail ranked number two in Oceania.
Lendlease’s Managing Director, Investment Management, Josh McHutchison says: “Around the world, we continue to see more and more investment in sustainable world-class assets. Established rating tools like Green Star provide investors with an independent verification of performance and helps us position our funds to meet the demands of leading investors.”
Dexus Wholesale Property Fund was named a global sector leader for diversified office and retail groups.
Dexus Chief Executive Officer Darren Steinberg says: “Being named a global sector leader recognises our success in delivering world class, sustainable properties and is testament to the hard work and efforts of our sustainability team.”
Stockland was ranked first globally among listed companies for the diversified office and retail sector. Stockland also announced today they will invest $23.5 million roll out Australia’s largest ever property solar project at 10 of its shopping centres across the country.
Davina Rooney, Stockland General Manager for Sustainability, says: “At Stockland, sustainability is integral to what we do, creating vibrant and thriving places to shop, work and live, now and into the future. We continue to take a concerted effort to improve and measure sustainability across the business - within our assets, through our supply chain, the location and design of our communities and through tangible benefits to our customers and retailers.”
“We are 100% committed to investing in sustainability for the business and extremely proud to be setting this new standard in solar for Australian property.”
GRESB’s regional sector leaders for Australia/NZ are:
Meanwhile, the Dow Jones Sustainability Index named Mirvac the top real estate group. Investment specialist group RobecoSAM, which compiles the rankings, singled out Mirvac’s “climate strategy and approach to biodiversity” as “particularly laudable”.
Mirvac's top ranking was underpinned by strengths in corporate governance, impact measurement and valuation, environmental reporting, and social reporting.
“The result demonstrates our whole-hearted commitment to sustainability in its broadest form, which provides real value to our communities, customers, partners and investors,” says Mirvac’s CEO and Managing Director, Susan Lloyd-Hurwitz.
“We applaud these companies – all of them dedicated members of the GBCA – for their exceptional and enduring leadership in sustainability,” Ms Madew concludes.