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txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
8.3 Making your buildings work better
Chair: Louise Ellison, research director, Investment Property Forum
Jon Lovell, head of sustainability, Drivers Jonas Deloitte
David Mummery, head of customer services, Legal & General Investment Management
David Crump, construction director, Quintain Estates and Development
Rachel Candy, group analyst, Quintain Estates and Development
© 2010 Deloitte LLP. Private and confidential.
Getting the aim right:
Targeting low-carbon intervention to improve investment performance
Jon Lovell, Head of Sustainability
© 2010 Deloitte LLP. Private and confidential.
Drivers of Sustainable Property
Drivers Jonas Deloitte4
1. FINANCIALReducing costs, cash flow stability and optimising profits
2. REPUTATIONAL Differentiation and protection of brand integrity
3. LEGALEnsuring statutory compliance and minimising negative exposure to environmental regulation
4. PHYSICALManaging and abating environmental (climate) risk
5. ETHICAL Promotion of social and intergenerational equity
6. MARKETMitigating against the risk of tenant migration and investment depreciation
GREATER
RESILIENCE
GREATER
COMPETITIVENESS
VALUE
DIFFERENTIAL
© 2010 Deloitte LLP. Private and confidential.
Reality CheckBarriers to progressive change
Drivers Jonas Deloitte5
Inadequate regulation
Awareness
deficit
Lack of
transparency
Split
incentives
Lack of
leadership
Mal-aligned
fiscal policyInconsistent
policy
Deferred
impactsLimited
reporting
Weak
enforcement
Poor
measurement
INERTIA
Low skills base Limited intelligence
Confusion and absence of deterrent
Capex /
Opex tension
Opportunity
costs
Incorrect price signals
Suppressed value correlation
© 2010 Deloitte LLP. Private and confidential.
Anticipated Impact on Value
Drivers Jonas Deloitte6
Regulatory impact Likely value implication
Source: HurleyPalmerFlatt 2009V
AL
UE
TIMESource: Drivers Jonas Deloitte
base case
value erosion
(marginal risk)
accelerated
obsolescence
(significant risk)
high
© 2010 Deloitte LLP. Private and confidential.
Fiduciary Duty
Drivers Jonas Deloitte7
“…a responsible investment option should be the default position. Therefore, responsible
investment, active ownership and the promotion of sustainable business practices should be a
routine part of all investment arrangements, rather than the optional add-on...”
“…it is the fiduciary duty of trustees and investors to understand and consider
sustainable investment issues when looking at investing in real estate.”
© 2010 Deloitte LLP. Private and confidential.
Investment portfoliosFrom benchmarking to intelligent portfolio strategy
Drivers Jonas Deloitte8
How do our assets
perform?
How can they be improved?
Who pays?
What are the risks of non-
action?
OPPORTUNITY
What is the impact on investment
performance? Net Present Values adjusted for
sustainability impacts
Improved terms and extended
leases
BASE CASE
OPTIONS
NET COSTS
MODEL RISK
STRESS TEST
Ratings • Proportion of capital value
• Exposure of rental incomeBenchmarks
Landlord • Lease provisions
• Grant funding opportunitiesTenant
Management• To what standard?
• Net CO2 savings
• At what (lifecycle) cost?
Refurbishment
Redevelopment
Physical risks • Proportion of ERV
• Timing of reversions
• Influences on tenant behaviour• Availability of better properties
• Affordability: refurb v relocation
Compliance risks
Tenant migration risks
TARGETED INTERVENTION
© 2010 Deloitte LLP. Private and confidential.
Theory into practice
Drivers Jonas Deloitte9
A+
A
B
C
D
E
F
G
Current EPC rating
Preventing Occupier Migration
• One of the first Low Carbon Workplaces,
working with The Carbon Trust
• Renegotiated lease terms – benefits shared
between landlord and tenant
• Low Carbon Charter (post-occupancy
evaluation)
• 130kg/CO2/m2 � 50kg/CO2/m
2
• Ensures subsequent fit out does not impact
on the refurbishment
© 2010 Deloitte LLP. Private and confidential.
Theory into practice
Drivers Jonas Deloitte10
A+
A
B
C
D
E
F
G
Post-refurbishment EPC rating (estimated)
Preventing Occupier Migration
• One of the first Low Carbon Workplaces,
working with The Carbon Trust
• Renegotiated lease terms – benefits shared
between landlord and tenant
• Low Carbon Charter (post-occupancy
evaluation)
• 130kg/CO2/m2 � 50kg/CO2/m
2
• Ensures subsequent fit out does not impact
on the refurbishment
© 2010 Deloitte LLP. Private and confidential.
This document is confidential and prepared solely for your
information. Therefore you should not, without our prior writtenconsent, refer to or use our name or this document for any other
purpose, disclose them or refer to them in any prospectus or other document, or make them available or communicate them to
any other party. No other party is entitled to rely on our document for any purpose whatsoever and thus we accept no liability to any other party who is shown or gains access to this document.
Deloitte LLP is a limited liability partnership registered in England
and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United
Kingdom. Drivers Jonas Deloitte is a trading name of Deloitte LLP, which is the United Kingdom member firm of Deloitte
Touche Tohmatsu ('DTT'), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal
structure of DTT and its member firms, the United Kingdom member firm of DTT.
txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
Quintain Estatesand Development PLC
Making Buildings better
Rachel Candy
David Crump
080605Quintain Estatesand Development PLC
Enhanced Business Performance
Attracting & Maintaining Tenants
• Lower Energy Costs � Higher Rents & Shorter Voids
Improved Tenant Quality
• Blue Chip Tenant Sustainable Policies & CRCs
• Improved tenants � Higher Values
Establish Credentials of Location
• Future Proof Buildings � Higher Values
Improved Cashflow and Values
Value Additive or Defensive
080605Quintain Estatesand Development PLC
How Green is Green ? - What Do We Target ?
• Exceed Regulation for Carbon in Use
• Target: BREEAM Excellent for Offices
• Target: CSH level 4 for Residential
• Other Development Measures
• Reduce Embedded Carbon in Construction Materials
• Reduce Construction Material Landfill
• Opportunities for District-wide Measures
• Green Lease
Location
14 Pier Walk
Sustainability systems
Comparison of Buildings A & B to Benchmarks
0
25
50
75
100
125
150
Typical Good Practice Block B Block A
kg
CO
2/m
2Carbon Emissions
080605Quintain Estatesand Development PLC
Greenwich Peninsula:14 Pier Walk & 6 Mitre Passage
• Speculative Office Development
• BREEAM Excellent
• Attracted Public Sector Tenants
• High Aspirations for Sustainability
• No Void at 14 Pier Walk
• 2 Floors let at 6 Mitre Passage
• Establish Greenwich Peninsula as a Green Office Location
080605Quintain Estatesand Development PLC
14 Pier Walk - Green Lease
Ground Source Heat Pump
• Tenant & landlord share maintenance responsibility
• Tenant covenants to use as intended
A Commitment to Provide CHP within 5 years
Water Efficiency Measures
• Tenant covenants to use as intended
Waste Management
• Tenant commits to work to a waste minimisation plan
• Pre-sorting of waste
• Co mingled recyclables
• Glass
• Food waste
• Black bag (landfill)
Tenant commits to share data - energy, water and waste
Envac
49
Envac
Thank you
txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
txt tools – Official SMS Partner
Text conference speakers on 88020, preface your message with base4
