CEFC tips $100m into AMP Capital green building fund

The Clean energy Finance Corporation has tipped $100 million into an Australian investment fund targeting zero carbon emissions for an impressive portfolio of buildings, including landmark energy efficient offices in the heart of Sydney and Melbourne.

The $4.7 billion AMP Capital Wholesale Office Fund (AWOF) attracted the attention of the federal government’s green bank with its ambitious target of delivering a property portfolio of net zero carbon emission buildings within 13 years, including key assets like Australian Technology Park and Quay Quarter Tower, which is targeting a 6 Star Green Star and 5.5 star NABERS rating once completed.

AWOF’s 2030 target exceeds the goals of the internationally recognised Science Based Targets program, which aims for a minimum 55 per cent reduction in the property sector by 2050.

The CEFC said on Wednesday that its investment in AWOF would help deliver its emissions reduction goals, while also accelerating the development of world-leading energy efficient commercial property portfolios in Australia – a key national market for emissions reductions.

AWOF will also aim for a portfolio-wide average NABERS Base Building Energy rating of 5.0 stars by 2020 and 5.5 stars by 2030, using a wide range of technologies, including the installation or procurement of renewable energy generation.

The agreement will also see AWOF foster greater knowledge sharing across the property sector, encouraging wider access to property energy consumption data, publication of practical information on the implementation of science-based targets and sharing of information on regulatory and planning barriers to energy efficiency.

CEFC investment funds lead Rory Lonergan said that AWOF’s ambitious approach to emissions reduction and energy efficiency set a new benchmark for the commercial property sector in Australia.

“There is enormous opportunity to reduce emissions from buildings and to really push the boundaries of energy efficiency in the property sector,”  Lonergan said.

The AWOF portfolio includes the the redevelopment of the existing 50 Bridge Street property in Sydney, as well as Quay Quarter Tower and the wider Quay Quarter Sydney precinct.

It also includes 200 George Street, Sydney and Melbourne’s Collins Place and 700 Bourke Street, the latter of which became the fourth in Australia to achieve the 6 Green Star performance rating from the Green Building Council of Australia.

Lonergan says the CEFC is also impressed with AMP Capital’s increased focus on energy consumption at the tenancy level, by engaging with and encouraging tenants to achieve NABERS ratings at the same time as the Base Building Ratings, and seeking to negotiate green lease clauses with mutual NABERS performance targets.

For AMP Capital, the CEFC’s investment in AWOF not only demonstrates investor appetite in sustainable portfolios, but validates the work of the company’s AWOF team, which managed to attract more than $700 million in equity investment in 2016.

“Responsible investors are increasingly looking for demonstrably green assets, which deliver investment returns while minimising risk,” said AMP Capital’s head of sustainability, real estate, Chris Nunn.

“Our customers also demand high sustainability standards that support their wellbeing, align with their values and minimise operating costs.

“We pride ourselves on having a holistic sustainability strategy with ambitious long term emissions reduction targets for our real estate assets, which in turn will influence our supply chain and benefit the broader community.”