The increasing number of businesses signing up to net zero targets, an ongoing focus on minimising operating costs, and shifts in how businesses and consumers work, live and shop has led to a growing demand for sustainable spaces in the commercial property sector.
PMG Funds has been a key player in the sector’s drive for sustainable change, prioritising longevity and sustainability in our relationship-based, collaborative approach to property management.
Meeting evolving tenant expectations
Our Property and Facilities Management teams work closely with tenants and suppliers to understand and support their evolving needs, creating high-quality spaces that are fit-for-purpose for tenants, while improving the overall value of the properties and ensuring sustainable returns for investors.
“Sustainability is an increasing focus for occupiers when making property decisions and we acknowledge PMG's unique opportunity to play a prominent role in leading the sector. We also value bringing our tenants and suppliers along to drive positive climate action and facilitate long-term change,” says Jamie Reid, PMG General Manager Property.
This partnership approach has resulted in various successful sustainability initiatives across our portfolio. Since embarking on our sustainability journey in 2019, some of these initiatives have included:
• Achieving and maintaining Toitū Net CarbonZero certification
• Publishing two Sustainability Reports (2021, 2023), with the third to be published in 2024
• Installing waste and recycling systems across 73% of properties where PMG manages waste
• Recycling 500 tonnes of waste
• Regular measurement, reporting and management of waste streams, as well as educating tenants
• Installing bike charging stations and EV charging stations at Bethlehem Town Centre, Tauranga
• Installing EV chargers at 152 Fanshawe Street, Auckland
• Introducing after-hours air-conditioning management via an easy-to-use app
• Installing carbon-reduced concrete at 25 Link Drive, Christchurch
• Partnering with Sunergise to roll out solar installation across the portfolio
• Awarded the FMANZ Sustainability Impact Award 2023
The value case for sustainability
The value case for sustainability extends beyond reducing emissions, to the business benefits that flow from sustainability initiatives.
“We've not only reduced operating costs for our tenants but also increased the overall value of our properties, thereby maximising returns for our investors,” says Simi Mukherjee, PMG Head of Facilities.
This statement echoes recent research, which shows that sustainable buildings have a higher return on investment over their lifetime. JLL’s 2022 Global Return on Sustainability reports that BREEAM (Building Research Establishment Environmental Assessment Method) rated buildings recorded rent premiums between 4% and 11% and enjoyed 100% pre-leasing compared to 50% for standard properties.
According to the 2023 Enabling a net-zero built environment report by Colliers, sustainable buildings are projected to repay a probable 20-year rental premium by a factor of approximately three through operating cost savings alone.
For PMG, sustainability initiatives support our efforts to grow value for our investors over time by increasing asset values and tenant retention, while also supporting our tenants to grow their businesses, and attract and retain staff. An average occupancy rate of 99% across our portfolio (as of 1 January 2024) is a testament to this.
“The value that green buildings provide has become increasingly crucial to our tenants and investors. The positive feedback we've received, and recent industry recognition after being awarded the FMANZ Sustainability Impact Award 2023, highlights the impact and increased return on Invesment (ROI) of these sustainability initiatives,” affirms Jamie.
Disclaimer: The information in this blog is of a general nature and was current on 1 April 2024. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013 and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advice provider before making any investment decisions.
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