LETTER FROM THE EDITOR: For years we’ve suspected that real estate agents hold the keys to the universe when it comes to property and sustainability outcomes. Meeting up with the sustainability team at Colliers in Sydney late last week finally converted this suspicion to conviction.
A reasonable person might have thought, with a high degree of reason and logic, that the people who drive more sustainable buildings are the developer, the investor, the architect, or the engineer.
But through many years of talking to agents, it became clear that it was the agents who pulled the purse strings. So: whether the new building absolutely needed floor to ceiling windows, central services cores or open plan (perhaps with the core on the side) what finishes and colours to use, what materials and what kind of performance profile it needed in terms of technology and eventually environmental metrics.
Why the agents?
Because these are the guys and gals with their ears to the ground. The people with the hyper-tuned antennae on which their high pressure jobs depend for success.
They need to know not just what the current rents are – both “face” rents which is what is publicly declared and “effective” which is what goes into the bank account after cashbacks and the cost of the new fitout etc is deducted.
They also need to know what the competition is in terms of other tenants and new developments.
Plus the prevailing winds of change in the consumer market that might drive the viability or desirability of that particular office product.
And they need to know all things three or even five years in advance because building a big office building (or any significant structure) takes a lot of time to come to market.
We know from the work of Cristian Criado Perez at the University of NSW that evidenced-based decision-making doesn’t come into it – he interviewed 1000 developers, builders, architects and engineers and most of them said decisions were based on what the guy down the road had built. “We’ll have what he’s having,” in other words. Change in the property world is incremental indeed.
The good news is that agents who just a few years would shuffle uncomfortably if you mentioned sustainability and Green Star and are finally hearing the siren call of a greener world. The clever ones have twigged to this shift in thinking that is catalysing a revolution bigger than the industrial one.
Clients need to pay attention
It was a lift in optimism to meet the Colliers sustainability team who are helping to consolidate this shift.
Lisa Hinde has been head of sustainability at Colliers for more than a year after nearly
Lisa Hinde has been head of sustainability at Colliers for more than a year after nearly seven years at JLL (including a variety GBCA committees in between), and Simon Ng, who notched up eight years at GBCA full time and has an engineering background. And it was encouraging two because these two won’t be making up nice-sounding greenwash fluff, because they know what’s under the hood and what needs to be installed there.
Our conversation not incidentally included the significant uptick of interest from the Australian Consumer and Competition Commission in greenwashing.
What Hinde and Ng pointed out is that there is increasingly serious input from the sustainability team to support the agency side of the business when dealing with clients and what they need, whether tenants or developers or investors at the start of projects.
And clients need to pay attention to the advice.
They don’t want to be caught out as one developer was when a corporate tenant with a big requirement for new headquarters asked about the ESG strategy only to be met with a blank stare… and promptly took the “Goodbye Charlie” exit.
Hinde said her team helps with emerging concepts around sustainable development, including “the new language around electrification, around Indigenous engagement, around different methods of communicating with tenants, transparency.”
It also includes the area of digitisation that’s coming into play that can only be established at the very beginning of a project, she says.
“So when that brief is then handed to all the parties subsequent to that initial pitch, those project team members know exactly what the intent of that building is from the outset. It’s not retrofitted on at the end.”
The agent paints a picture of what the development could yield in terms of both financial and benefits. And it’s this, Hinde says, that is “the most streamlined and efficient way for really relevant, really important ESG credentials or ESD credentials to be introduced as part of that development. Because then you’re not fighting against the brief as you work down the chain.”
She likens them to an insurance agency.
“They tend to know exactly what’s happening in the market at that time. And so they adapt and can be very, very nimble with new requirements that come. In the same way that insurance agencies have to keep on top of all those new trends, all those new requirements, just to make sure that their claims and policies have been appropriately priced and delivered.
“The leasing agents are looking around, hearing of the prescriptive measures that are, in the eyes of their occupants, a minimum standard or expectation [for] these new premium assets. Or if it’s a repositioned asset, what the expectation is.”
New standards of First Nations engagement
The way she says her team’s role is to help the agency team to “translate some of the new standards that are coming out whether it’s around embodied carbon, whether it’s around appropriate Indigenous engagement.”
On the latter there’s been some good examples and some “not-so-great” or inappropriate. By this she means things like artwork, which can veer too close to tokenistic.
“I mean, artwork is very important, but to just do artwork, and nothing else is not really the intent of a reconciliation process. And so the good ones, you know, do the artwork, do the cultural engagement, do the ongoing commitment to procurement with Indigenous parties.”
She thinks the appointment of the highly regarded Jodie Taylor as chief executive officer of Indigenous business group Supply Nation, (and previously with International Towers at Barangaroo) is a great move that should improve outcomes in that field.