Developers give old city buildings a green facelift

Australian Financial ReviewSPECIAL REPORT − CITY SPACE

With space for new buildings in short supply, some companies are turning to renovation rescue, writes Miriam Hechtman.

Can’t teach an old dog new tricks? What about revamping an old building into something new and green? With limited space for new buildings in cities and many existing buildings in need of a makeover, thedecision to refurbish is becoming a popular choice for developers looking for a more sustainable option.

West Australian property group Hawaiian has made history with its refurbishment of 50 Pitt Street inSydney’s central business district. It is the first existing building in Sydney to achieve a four−star green staroffice design rating from Green Building Council Australia.

The refurbishment, which will be completed early next year, is the company’s first acquisition in the Sydneyproperty market.

Hawaiian’s general manager of property development, Stuart Duplock, says that in addition to adhering to thecompany’s social responsibility agenda, refurbishing an existing building is a valid response to the market. “Partly it’s the right thing to do, but it’s also gathering momentum in the marketplace, so that it is what theastute developer will be doing,” he says.

Some of the green star rated features in the refurbishment include: a new chilled−beam airconditioningsystem; green star compliant interior and exterior paint finishes; carpets and other fixtures; parking space forbicycles; and lockers and showers for tenants. Individual tenancies will be able to monitor their energy use,and carbon dioxide outputs will be monitored on a floor−by−floor basis.

Intangible benefits such as workforce satisfaction and “a good spin−off of our brand” are also incentives fordevelopers to consider, says Duplock. “And who knows where the legislative landscape is going to be in thefuture in relation to requirements to deliver socially responsible building outcomes? There could be taxcredits, benefits with your insurance, or there might be other incentives.

By anticipating these changes, Duplock says the company is “future−proofing the building to some extent”. Hawaiian spent $13 million on its refurbishment, elevating the building from a B−grade standard to A−grade.The company added about 7 per cent to its refurbishment budget to cover projects related to green star issues.“Commercially, the challenge is in justifying the cost because it’s not always possible to quantify all thebenefits,” says Duplock.

Commitment to the process from the client is essential, says principal consultant Graeme Allen atHBO+EMTB, the design firm commissioned for the refurbishment of the property.“The client has to be actively involved in the design project control group, so that it can be aware on a moreeducated basis as to the options that are available and also direct some of the cost expenditure through thedesign process.

Having the entire team engaged and working on the project early on is wise, “because every decision that getsmade will affect the whole process”, says GBCA executive director Suzie Guthridge. She also recommendsusing green star as early as possible in the process. According to the council, 27 buildings have been officially certified for green star office design and a further262 projects are registered for certification. “We’re certainly starting to see the uptake of green star within a refurbished building; but new buildings arethe most popular because obviously it’s easier to design from scratch than to go back and I guess start again,”she says.

The council encourages refurbishment, having credits that relate directly to the re−use of an old building,such as the re−use of fixtures and fittings. 50 Pitt Street is also registered for the “green star as built” rating,which can only be certified once the building has been completed.Refurbishing a building does pose challenges specific to the property. The orientation of a building, forexample, cannot be changed, which may affect energy use within it, says Guthridge.

Location, indoorenvironment quality and water are also challenges. “Obviously space, and where you can locate rainwater tanks and rainwater harvesting can be a little bit moredifficult [in existing buildings],” says Guthridge. Moreover, educating tenants that refurbished sustainablebuildings are just as good as new “lean green buildings” may also be challenging, she says.

The environmental cost to refurbish a building is much lower given the cost of the the energy requiredinvolved in building anew, says Guthridge. Financially, it depends on how “green” you want the building to be, but “common sense tells you that ifyou’re re−using, it’s going to cost you less financially than if you’re starting from scratch and buying all thoseproducts again,” she says. And Duplock agrees: “Refurbishing, that’s where the biggest opportunity lies.”

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