Green Designs Could Usher In New Generation Of Industrial Building

Growing awareness around the benefits of environmentally sensitive design could support a new generation of green industrial & logistics assets in Australia.

CBRE Senior Research Manager Kate Bailey said while historically there had been less importance placed on sustainable design elements in the industrial sector, there was growing awareness around it from a development and occupier perspective.

“More firms are seeing value in developing and retrofitting industrial buildings with a focus on environmentally sensitive design, improving operating costs, functionality and attracting tenants,” Ms Bailey said.

“The rapid take up of the Green Star building standard across the commercial property sector is a reflection of the significant benefits offered to both building owners and tenants – and the huge potential currently untapped in the area of industrial and logistics.”

A key example of this shift includes the collaboration between Dexus and Kathmandu to develop its 5 Star Green Star Laverton North facility in Melbourne. The facility incorporated a number of environmentally sustainable design initiatives such as solar panels, translucent roof sheeting, LED sensor lighting and strategic window placement for maximum light penetration during winter for natural heating.

Another industrial developer, Frasers Property, is currently working towards earning the title for first 6 Star Green Star industrial asset with its Horsley Drive Business Park in Sydney’s Wetherill Park.

“We are focused on delivering direct and real benefits to our customers by reducing their total occupancy costs and operating expenses, whilst also improving their health and wellbeing," Frasers Property Northern Region General Manager Ian Barter.

CBRE's latest report, The increasing importance of environmentally sensitive design for industrial assets, showed Green Star rated buildings use 66% less electricity than average buildings, produce 62% fewer greenhouse gas emissions, use 51% less potable water and recycle 96% of their waste.

Ms Bailey said given the nature of industrial and logistics assets, there was huge environmental benefits to be garnered with the rise of green design in the sector.

“Industrial facilities can operate 24 hours a day with workers completing often repetitive tasks in noisy and poorly lit environments," she said.

"The increase benefit of improving lighting alone can result in increased productivity of 18%."While the topic has found its way onto the agenda for both developers and occupiers in the industrial sector, CBRE’s Senior Managing Director for Industrial & Logistics in the Pacific region Matt Haddon said it wasn’t yet as much of a priority for investors.

“It’s still quite rare for many passive investors to include environmentally sensitive design considerations on their list of key buying criteria or even enquire about an asset’s Green Star rating,” Mr Haddon said.

“However, as the benefits of productivity, operating cost minimisation and tenant attraction and retention that can be achieved through Green Star construction become better understood across the industry, we think it’s only a matter of time before this practice becomes standard and that investors in the industrial and logistics space begin appreciating and paying a premium for assets that have the capacity to deliver these attributes.”