Green buildings attract great tenants

8:31 PM Tuesday April 9, 2019 Colin Taylor

New buildings with high Green Star ratings, like Mansons’ 33 Broadway Newmarket, attract highly quality tenants. Photo / Supplied

Landlords with Green Star rated buildings win big when it comes to retaining tenants, adding sustained income benefits and long-term value to their buildings, according to new property research. 

The analysis contained within Colliers International’s latest monthly report comes ahead of the New Zealand Green Property Summit tomorrow, Thursday April 11, in Auckland’s Aotea Centre. 

The research shows Auckland CBD’s December 2018 overall office vacancy rate of 5.2 per cent is a record low, but Green Star rated buildings have an overall vacancy rate of just four per cent.

In metropolitan Auckland, which covers all office space outside of the CBD, there is a vacancy rate of 6.7 per cent compared with a metropolitan Auckland green building vacancy of three per cent.

In Wellington CBD, the overall vacancy rate is 6.2 per cent, while there are currently no vacancies in Green Star rated buildings.

Chris Dibble, Director of Research and Communications at Colliers, says many studies focus on a variety of benefits, many for the occupier.

“There are numerous articles and research supporting the cost benefit for occupiers on operating expenses and a growing number of studies about the health and wellbeing for staff which improves productivity. 

“Our analysis on vacancy rates by Green Star ratings shows a clear winner when it comes to occupancy rates. And, for landlords, higher occupancy rates lead to more sustained income and value growth over the long-term.

“Due to most of the Green Star rated buildings also being high-quality modern premises, they also achieve top-end market rents and investment yields,” says Dibble.

There have now been over 160 buildings and fit-out projects certified in New Zealand with 70 per cent in the commercial office sector and around 57 per cent in Auckland.

The most recent office premises to receive a green star rating was Argosy Property’s building at 82 Wyndham St, Auckland, in February 2019. The building received a five-star green office-built rating.

Argosy Property has also received Green Star ratings for two Wellington buildings at 15 Stout St and Te Puni Kokiri House at 43 Lambton Quay. 

Mansons TCLM is one of the most prolific building owners/developers to achieve Green Star ratings. According to Green Building Council records Mansons has received 16 Green Star ratings for various buildings and fit-outs.

Dibble notes that the most recent for Mansons is a new building at 33 Broadway in Newmarket, Auckland.

“It is common for new, premier buildings that achieve high Green Star ratings to have high-calibre tenants. Mansons’ new building at 33 Broadway is a prime example where Mercury has its head office and Tegel has recently signed up as the building's secondary tenant. “

Mansons is also looking to enter the top echelon of sustainable building ratings with the new development at 155 Fanshawe St, which is currently under construction.

“The Fanshawe St development is targeting a six-star green built rating. Only the Geyser Building and Mason Brothers Building have received a similar built rating. Mansons is also targeting a six-star rating for its own headquarters being developed in Parnell.”

The recently disclosed sale of 155 Fanshawe St was to an offshore pension fund for more than $247 million.