Investa & Built to transform Australia’s aging office stock with new brown to green investment venture
Australian construction and development group, Built and leading Australian investment manager, Investa have partnered to launch a new Sustainable Adaptive Reuse venture that focuses on the challenge and opportunity of repurposing ESG-obsolete CBD assets into sustainable A-grade commercial office buildings.
The venture presents a unique opportunity to acquire, unlock, and transform existing secondary assets. Approximately 80%1 of ‘mature city’ office buildings which exist today will still be in use in 2050. To meet net zero commitments, existing commercial stock will have to be retrofitted at a rate of between 3.0%-3.5% per year.
The venture leverages the strong sustainability credentials of both partners, as well as Built’s extensive development and construction experience in unlocking complex heritage redevelopments, and Investa’s recognised integrated property platform and development capability. It aims to provide a unique turnkey solution to this ESG challenge and a pathway to build a high quality Australian commercial office portfolio.
Bringing new life to secondary assets, the venture is seeking to have significant reductions in embodied carbon of 40% and target minimum 5-Star NABERS weighted average portfolio rating. Through adaptations in development, the buildings will be fully electric and target Green Star and WELL building ratings and, upon stabilisation, the buildings will be net zero Scope 1 and Scope 2 emissions.
Peter Menegazzo, Chief Executive Officer, Investa said: “We are delighted to work together on this venture signifying the coming together of two leaders in their fields.
“Repurposing ESG-obsolete assets to create bespoke, high quality and amenity-rich workplaces with leading ESG credentials for forward thinking employers to occupy is a theme we strongly believe in both from an occupier and investor perspective.”
He added “Owners who have not invested in their assets, or who have held onto low grade stock, face both asset devaluation as well as asset obsolescence. It is here where the venture will focus.
“This theme is resonating strongly with investment partners, with a number of investors actively engaged in reviewing opportunities.”
Brett Mason, CEO and Managing Director, Built added: “With the high market demand for sustainable assets from both investors and tenants here to stay, we’re excited to partner with Investa and create an opportunity that offers a unique ability to identify, deliver and manage high quality ESG commercial office developments in the one venture.
“We’ve proven the success and increased demand for a new ‘Brown to Green’ approach through our own experience with boutique developments like Sub Station No. 164 which saw the conversion of two disused heritage industrial buildings into a contemporary, character-laded, 6-Star Green Star office tower.
“Not only did the retention of the original buildings in construction reduce embodied carbon by 23% in comparison to a conventional build, Built also secured an international fund partner and fully leased the building during Covid and challenging economic conditions showing the market demand for these types of assets,” he added.
1.JLL, ‘Retrofitting Buildings to be Future-Fit. The journey to decarbonization’, November 2022