Commercial Property: Green Vs Not-So-Green

Your Green-Star Rating can affect your Building's ValueA week or so ago, I briefly explained to you the NABERS “green rating” system, as it relates to Commercial property.

Recent research (undertaken by the Universities of Western Sydney & Maastricht in the Netherlands) has been released by the Australian Property Institute & Property Funds Association of Australia, under the title of Building Better Returns.

The report reveals that a 5-star NABERS Energy-rated building would provide a 9% value premium overall, compared with buildings without any ranking.

Interestingly, there was no value premium found for Office buildings below a 3-star NABERS rating. In fact, rentals within these lower-rated buildings appear to be discounted by between 6% to 9%, compared with 5-star alternatives.

But that’s not all bad news for Landlords — because when times get tough, tenants tend to gravitate towards cheaper space.

Plus, with very few new 5-star offerings currently in the pipeline, these lesser-rated buildings will see significant rental growth over the next 3 to 4 years.

Bottom Line: If you … do your homework, seek good professional advice and “cut your cloth” to fit within your budget … then, you can still make some serious gains over the next five years.


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