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Green office towers cast shadow over Sydney

By John Muscat - posted Thursday, 7 February 2013

Notwithstanding the pushy New Age rhetoric, ABW is more an economic-cum-technological opportunity for employers, than a revolt by the young and restless. Focus on costs is inevitable when economic conditions are so tight, and information and communications devices so ubiquitous and portable. A popular measure of office space efficiency is the workspace ratio, explains a researcher at Jones Lang Lasalle, or the number of square metres occupied by each office worker. The typical ratio is 15 square metres per person, but technology is freeing up workers to leave the office, so occupancy is typically now between 40 and 50 per cent, which translates, on average, to each worker occupying 37.5 square metres. "That's expensive space", he says.

Other research found that in a traditional office, between 55 and 85 per cent of desks are not used at any given time. Yet other studies indicate that "trading off individual territory for shared areas" can reduce floor space requirements by 20 to 40 per cent. This all leads directly to the bottom line. By cutting the amounts paid for rent and outgoings, says a Colliers researcher, ABW could reduce a firm's total cost by up to 30 per cent.

That's reason enough to drive large organisations out of their digs in Martin Place and the old office core, mostly for state-of-the-art towers designed to accommodate ABW floor-plans and facilities. "Macquarie Bank was an early mover (to Shelley Street), as was Westpac to its vertical campus in the western central business district", report Jones Lang Lasalle on the major banks, and "[m]ore recently, the Commonwealth Bank has moved to Darling Quarter and ANZ will soon move to Pitt Street." One way or another, the larger financial institutions, whose head-office functions were scattered throughout the CBD, have "implemented strategies to consolidate their space requirements and build in [ABW] flexibility."


This isn't happening to satisfy worker demands for "sustainability", but recourse to "green ethics" no doubt helped prise the sceptical from their desks.

Green-star trek

Nor have landlords failed to gain from the floor-space revolution. Large and institutional players like real estate investment trusts and fund managers profited from a wave of demand for innovative, capital-intensive building stock. More unexpectedly, they encountered a rising class of green-tinged activists, designers and architects, whose obsessions with energy-saving and natural power came in useful. As climate change crept up the political agenda, progressives across all tiers of government soon turned to the built environment, churning out laws and regulations that defined and mandated 'green building' standards. The property industry's peak bodies embraced the concept.

This is somewhat paradoxical. Despite its obsession with all sorts of metrics, ratios and indices, the property sector doesn't seem to care that the object of these standards is unmeasurable. Their effect on the global climate system can never be known (it was always fanciful to suggest that Australian building styles would affect the climate, but anyone who believes it after Copenhagen, Cancun, Durban and Rio is deluded).

On the other hand, the financial benefits are rather more tangible. The key isNABERS, the National Australian Built Environment Rating System. Administered nationally by the New South Wales Office of Environment and Heritage, NABERS is a rating scale from a low of 1 to a high of 6 stars (the "Green Star") applicable to buildings or tenancies, based on criteria like energy efficiency, water usage, waste management and indoor environment quality. The federal and some state governments have mandated at least a 4.5 star rating for public sector offices, and 4.5 has generally become the minimum for image-conscious corporates. A building or suite designed or refurbished for ABW will naturally score well.

The Commonwealth Bank's new campus-style headquarters at Darling Quarter is in the CBD's "western corridor", formerly a "zone in transition" near the disused docks and freight yards of Darling Harbour. It achieved a coveted 6 star rating. Coming up with two curved-roof buildings of six and eight stories, "the designers have emphasised the natural light, air quality and water recycling … with features including a full-height atrium, single-pass ventilation, blackwater recycling, trigeneration power and passive chill beam air-conditioning." Westpac's new campus further up the corridor at 275 Kent Street achieved 4 stars, and the three towers underway atBarangaroo, a futuristic, mixed-use precinct at the corridor's northern end, meet 6 star specifications. ANZ's new headquarters at 242 Pitt Street (161 Castlereagh), towering over the CBD's "mid-town" south of the retail core, also aims for 6 stars.


The most vaunted 6 star tower is the oval-shaped, "flagship" tower at 1 Bligh Street.Using 3D software called Building Information Modelling or BIM, the designers conceived an edifice with "gas and solar panels reduc[ing] electricity consumption by as much as 25 per cent, while water recycling reduces mains water by up to 90 per cent ..." But its "principal sustainability feature is a fully glazed doubleskin façade made from clear glass panels … allow[ing] for automated sunshading that dramatically reduces the heat load on the building, which means [it needs] less airconditioning and can have … better natural light." First-tier law firm Clayton Utz is the building's anchor tenant.

To the extent that creative designers, developers and landlords have combined to meet a demand in the market, these buildings are impressive enough. That's how markets should work. But on the pretext of "sustainability", activist politicians and officials have, effectively, codified the product and marketing strategies of the most powerful players. NABERS does that by granting official recognition to a system mirroring the star scale long used in the hotel industry. Overnight, hundreds of thousands of square metres of non-rated office space was downgraded. Rent-seeking opportunities for the owners of rated space proliferated, to the detriment of smaller, more marginal players, their tenants and peripheral regions. "While the NABERS rating of a building is not the sole factor for corporate tenants", said a CBRE director, "it is playing a significant role in selecting suitable office space."

Clover Moore, whose jurisdiction covers capital-rich Sydney CBD and surrounds, has actively boosted the interests of large and institutional landlords with a grab-bag of lucrative benefits. There's the CitySwitch Green Office program, which assists landlords leasing more than 2000 square metres of office space to achieve a mandatory NABERS rating; there are "green loans" for "sustainable retrofits" to be repaid as a levy on council rates; there's a scheme under the Better Buildings Partnership that enables commercial property owners to enter Environmental Upgrade Agreements (EUAs) and share the cost of green building upgrades with tenants; and there are exemptions from a levy on new construction for green initiatives.

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This article was first published on The New City.

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About the Author

John Muscat is a co-editor, along with Jeremy Gilling, of The New City, a web journal of urban and political affairs.

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