This article is from the Australian Property Journal archive
COMMERCIAL real estate financier MaxCap has been awarded a mandate by the Clean Energy Finance Corporation to finance sustainable building upgrades and continue the work to decarbonise the Australian property sector.
Under the $75 million investment mandate, MaxCap will originate, execute and manage a portfolio of real estate loans, aiming to attract further institutional capital to invest in the sustainable refurbishment of commercial buildings.
The mandate will target low rated commercial offices, hotels and retail assets, through repositioning and upgrade works that reduce operational emissions by at least 30%.
The new mandate has kicked started with a $35 million commitment to refurbish Quintessential’s 26-storey office tower at 30 Pirie Street. MaxCap will co-invest $35 million via the MaxCap Investment Trust (MIT).
“It is essential that we make our commercial properties fit for a net zero emissions future in the race to decarbonise. Commercial buildings in urban centres, suburbs and regional towns across Australia account for around half of the nation’s building stock and many have never undergone energy efficiency upgrades,” CEFC head of property Michael Di Russo said.
“Refurbishments like 30 Pirie Street in Adelaide’s CBD demonstrate to commercial property owners that relatively straightforward energy efficiency and renewable energy initiatives can deliver value for building owners and tenants alike and achieve broader scale change that can help meet ambitious sustainability goals across Australia’s commercial property sector. It’s great to be working with MaxCap to drive change and make our workplaces more sustainable as we work towards our national net zero goals.”
“We are delighted to be appointed as fund manager and to invest via our flagship Investment Trust with the CEFC who continue to demonstrate tremendous leadership as we strive for a net zero emissions future. We are also privileged to work with industry specialists such as Quintessential, who are highly regarded for their track record in regenerating commercial real estate assets.” MaxCap group executive chairman Wayne Lasky said.
Noah Warren, head assets at Quintessential said the CAPEX budget of $30 million will allow the group to undertake significant works that will enliven and regenerate the building, bringing it back to prime A-grade standard in heart of the Adelaide CBD.
The repositioning of 30 Pirie Street will target a 5 star NABERS Base Building Energy Rating with initiatives that include upgrading building management systems and controls, installation of solar panels and new energy monitoring systems, a comprehensive tuning program, and upgrades of lighting to LED.
Renovating existing building stock has been recognised as a key priority for achieving decarbonisation targets, with the International Energy Agency noting that retrofitting 20% of existing building stock by 2030 to net zero levels will require an annual deep renovation rate of over 2% from now to 2030 and beyond.
The built environment is a major consumer of energy, with buildings accounting for around half of Australia’s electricity use. Research suggests that just 56% of Australian offices have a current NABERS rating.
Around half of Australia’s overall building stock, many of the existing secondary commercial buildings throughout Australia, from urban centres to the suburbs and across regional towns, have never undergone energy efficiency upgrades, representing a significant opportunity for energy efficient improvements.