Only a third of industrial investors in Australia take into account the green credentials of buildings when making decisions on their investment strategies.
Only 38 per cent reported that sustainability initiatives were part of their investment strategy, which means 62 per cent are ignoring sustainability, according to Jones Lang LaSalle’s Industrial Investor Survey 2011.
The survey included 42 industrial investors from a broad mix of listed funds, unlisted funds, private investors, syndicates and developers controlling almost 750 industrial assets in Australia. JLL’s Australian head of industrial, Michael Fenton, said this take-up was much slower than the office sector.
”This is likely the result of the maturity of the office rating tools due to the fact that the pilot programs were initially in the office sector,” he said.
As a result of the GFC, industrial development was constrained by the cost of and access to debt finance and also by weaker demand from industrial occupiers for new space.
Mr Fenton said even as conditions had improved, the continuing focus on cost containment by many tenants and developers had affected sustainability considerations.
”But on the flip side, one-third cited cost reductions as the main reason for considering sustainability issues in the first place, so it is a double-edge sword,” he said.
The survey found that cost reduction drove those considering sustainability. Thirty per cent said it was the most important factor, followed by legislative or industry changes (17 per cent) and 11 per cent reported the most important factor for them was achieving NABERS or Green Star ratings. JLL’s director for national industrial research, Nick Crothers, said the sustainability momentum had slowed since a 2008 survey. Only 29 per cent this year reported that tenants were requesting information on sustainability initiatives for industrial assets.
”In contrast, a similar survey in 2008 showed that 52 per cent of industrial occupiers were willing to pay a 1 per cent to 10 per cent cost premium to occupy a sustainable building in the long term,” he said.
