CEFC targets energy hungry shopping centres, with $200m finance deal

The Clean Energy Finance Corporation has targeted energy efficiency – or lack there-of – in Australia’s massive retail property market, with a $200 million investment in major fund that aims to ramp up the energy performance of shopping centres around the country.

The CEFC said on Thursday that is had extended a senior debt facility to QIC’s Global Real Estate flagship Shopping Centre Fund (QSCF), marking the green bank’s largest property investment commitment to date.

The loan is designed to help QSCF bring its existing shopping centres across Queensland, Victoria, New South Wales and the ACT up to a minimum 4-star NABERS rating within five years, which would translate to energy savings of between 30 and 40 per cent.

To achieve this, the finance would be used to retrofit energy efficient technologies, including LED lighting; install onsite rooftop solar at the shopping centres; upgrade existing heating, ventilation and air-conditioning systems; and install sub-metering and energy data monitoring systems to optimise energy management processes.

CEFC Property sector lead Chris Wade said that in addition to upgrading the energy performance on existing assets in the fund’s portfolio, QIC would be seeking to design new shopping centres to a 5-Star NABERS Energy rating, using the latest energy efficiency and clean energy technologies.

“As part of the (loan) facility, QIC will also be working closely with the CEFC in relation to a range of other initiatives including the potential incorporation of electric vehicle infrastructure and engagement with centre tenants on the benefits of energy efficiency and clean energy initiatives,” Wade said.

CEFC CEO Ian Learmonth said Australian shopping centres, which account for 36 per cent of commercial building energy consumption, represented “enormous potential for improvement” in energy use, and an untapped opportunity to cut carbon emissions.

“We have more than 1,750 shopping centres in Australia, and yet less than 10 per cent of them have attained …(NABERS) ratings that measure how well they perform in terms of energy use,” Learmonth said.

“Our finance to QSCF will demonstrate how energy efficiency technologies and renewable energy sources like solar can make a difference in leading Australia towards net zero carbon buildings.”

For QIC, the CEFC deal was an important milestone for the organisation, and an economic no-brainer.

“In a broader sense, successfully delivering these initiatives contributes to achieving our triple bottom line objectives incorporating economic and environmental factors, and social priorities,” said QIC managing director of global real estate, Steve Leigh.

“Our ESG Strategy and operating procedures align with globally recognised standards and we partner with respected organisations to assist us in the delivery of programs designed to achieve industry best-practice.”

QSCF Fund Manager, Michael Fattouh said the partnership was also about managing energy risk across the fund’s retail portfolio.

“QSCF is also commencing work with the CEFC to understand potential pathways to achieving net zero carbon emissions across its portfolio, building on QIC Global Real Estate’s recently announced
target of generating 30 per cent of all base load power for retail asset common areas from renewable energy by 2025,” Fattouh said.