About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, February 20th, 7:16PM
rss
Investment News

Investing: The future of sustainable property

Globally Environmental Social and Governance factors are having a growing impact on how we invest, as asset managers, we now must go beyond just considering the short-term bottom line.

Tuesday, October 30th 2018, 8:00AM

by Pathfinder Asset Management

The Real Estate sector has also made a shift in how their operations making a strong push to a sustainable future. “Environmental Social and Governance” (ESG) is now catching up with “Location, Location, Location”. Our developed environment is crucial to everyday life and has resulted for the most part in well-governed real estate businesses, however, environmental and social factors have not always been considered. Professional services firm PWC thinks that needs to change, saying “sophisticated approach to ESG practices can be critical”, in their annual Emerging Trends in Real Estate report.

As a part of our everyday life, the developed environment (including shopping centres, hospitals, housing and offices) has a significant impact on the people that use them. A push towards a greener and more sustainable buildings is critical, property developers and managers now understand that this can make tenants happier and more productive – increasing occupancy and rental rates. The idea isn’t new it just hasn’t traditionally been applied to mainstream buildings yet. Singapore's Marina One is one example of the new wave of buildings. It has enough plants to change the climate of the building, filter the air and store enough carbon to make the building a carbon negative emitter. The multi-use building hosts Facebook as an office tenant and combines residential, shopping, fitness and entertainment facilities with open green shared spaces. The development has set out the blueprint for modern sustainable building design.

Real estate investment trusts (REITs) own and operate a broad range of properties, management teams must now think like the developers of Marina One, creating buildings that go beyond just providing a place to live, shop or work but a space that allows human interaction and social benefit. Happier tenants can mean higher rents.

Buildings are a major part of the built environment, consuming large amounts of energy and emitting large amounts of carbon. The UN Environment Programme estimates that the construction and operation of buildings account for 40% of global energy use. Architecture can have a positive impact on a social level. However, the real benefit to the triple bottom line (plant, people & profits) are the environmental improvements buildings can make. Cities including San Francisco and Toronto are now required by law to install solar power infrastructure in all new buildings. What may increase construction cost now will have benefits in the long term – making property owners think long-term, like responsible investors. It’s not just new building like Singapore's Marina One, the thinking can also be applied to retrofits. New York’s iconic Empire State building has been refreshed after decades of neglect. The retrofit included replacing over 6,500 single pane windows and installing reflective insulation. Power savings of 38% per year alone will pay off the redevelopment cost in just three years.

What does this all mean for investing? As disclosure and data improve investors will know which buildings are improving energy consumption, reducing water use and even their carbon footprint. This information will all flow to the triple bottom line and reward investors who seek out only the most sustainable properties in the market. Along with a host of other market data provides, S&P a global leader in financial data has made a comitment to producing green property data. Data examples include down to the building water monitoring, energy use and waste management. A well-run building like Marina One attracts better tenants that experience increased staff retention, optimised productivity and reduced environmental impacts from operations – all having a significant impact on the triple bottom line.

Karl Geal-Otter is an investment analyst at Pathfinder Asset Management, a boutique responsible investment fund manager. This commentary is not personalised investment advice - seek investment advice from an Authorised Financial Adviser before making investment decisions.

Tags: Pathfinder Asset Management

« Portfolio insurance protection explainedEquity market pullback »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend

Good Returns Investment Centre is brought to you by:

Subscribe Now

Keep up to date with the latest investment news
Subscribe to our newsletter today

FundSource Research
  • Harbour Income Fund
    11 February 2019
    The Harbour Income Fund is a diversified fund, with holdings across different asset classes, has relatively broad asset allocation ranges, and is reasonably...
  • Nikko AM Option Fund
    1 February 2019
    The Nikko AM Option Fund is a retail Fund that invests in to the Nikko AM Wholesale Option Fund. In both cases the Fund sells short term options to financial...
  • Legg Mason Brandywine Global Opportunistic Fixed Income Fund
    15 January 2019
    The Legg Mason Brandywine Global Opportunistic Fixed Income Fund is a high conviction and alpha seeking fund that is based around value investing. ...
© 2019 FundSource Research.

View more research papers »

Edison Investment Research
  • The Biotech Growth Trust
    15 February 2019
    Industry backdrop remains favourable
    The Biotech Growth Trust (BIOG) is managed by Geoff Hsu and Richard Klemm at OrbiMed Capital, one of the leading global healthcare asset managers. The...
  • Deutsche Beteiligungs
    15 February 2019
    Market sentiment weighing on portfolio value
    Deutsche Beteiligungs (DBAG) is making steady progress on its investment agenda, with three new acquisitions and several follow-on funding rounds totalling...
  • Aberdeen Latin American Income Fund
    11 February 2019
    Brighter prospects in Latin America
    Aberdeen Latin American Income Fund (ALAI) gives investors exposure to both Latin American equities and government debt, and offers a 4.9% dividend yield...
© 2019 Edison Investment Research.

View more research papers »

Today's Best Bank Rates
Heartland Bank 2.50  
Heartland Bank 2.50  
Based on a $50,000 deposit
More Rates »
Cash PIE Rates

Cash Funds

Institution Rate 33% 39%
ANZ 0.10    0.10    0.11
ASB Bank 0.10    0.41    0.42
ASB Bank 0.25    0.59    0.56
ASB Bank 0.30    0.61    0.64
ASB Bank 0.35    0.66    0.69
ASB Bank 0.40    0.72    0.75
BNZ 0.10    0.10    0.10
Heartland Bank 2.25    2.59    2.70
Kiwibank 0.75    0.77    0.88
Kiwibank 1.75    1.81    1.89
Nelson Building Society 3.75    3.90    4.08
SBS Bank 1.50    -    -
TSB Bank 1.60    1.64    1.71
Westpac 0.35    0.36    0.38
Westpac 0.10    0.10    0.11
Westpac 2.10    2.16    2.26

Term Funds

Institution Rate 33% 39%
ANZ Term Fund - 90 days 2.65    2.60    2.79
ANZ Term fund - 12 months 3.40    3.39    3.55
ANZ Term Fund - 120 days 3.00    3.09    3.22
ANZ Term fund - 6 months 3.25    3.45    3.60
ANZ Term Fund - 150 days 3.00    -    -
ANZ Term Fund - 9 months 3.40    -    -
ANZ Term Fund - 18 months 3.45    -    -
ANZ Term Fund - 2 years 3.50    -    -
ANZ Term Fund - 5 years 3.80    -    -
ASB Bank Term Fund - 90 days 2.60    2.67    2.79
ASB Bank Term Fund - 6 months 3.20    3.29    3.43
ASB Bank Term Fund - 12 months 3.20    3.33    3.48
ASB Bank Term Fund - 18 months 3.50    3.65    3.81
ASB Bank Term Fund - 2 years 3.65    3.81    3.98
ASB Bank Term Fund - 5 years 4.10    4.28    4.48
ASB Bank Term Fund - 9 months 3.60    3.75    3.92
BNZ Term PIE - 120 days 2.88    -    -
BNZ Term PIE - 150 days 2.98    3.38    3.53
BNZ Term PIE - 5 years 3.88    3.86    4.04
BNZ Term PIE - 2 years 3.50    3.91    4.09
BNZ Term PIE - 18 months 3.38    3.65    3.81
BNZ Term PIE - 12 months 3.55    3.38    3.53
BNZ Term PIE - 9 months 3.38    3.44    3.60
BNZ Term PIE - 6 months 3.28    3.75    3.92
BNZ Term PIE - 90 days 2.68    2.72    2.85
Co-operative Bank PIE Term Fund - 6 months 3.40    -    -
Heartland Bank Term Deposit PIE - 12 months 3.60    3.53    3.69
Heartland Bank Term Deposit PIE - 6 months 3.45    3.43    3.58
Heartland Bank Term Deposit PIE - 9 months 3.50    3.85    4.02
Heartland Bank Term Deposit PIE - 18 months 3.60    -    -
Heartland Bank Term Deposit PIE - 2 years 3.70    3.43    3.58
Heartland Bank Term Deposit PIE - 5 years 3.90    3.85    4.02
Kiwibank Term Deposit Fund - 90 days 2.65    2.72    2.82
Kiwibank Term Deposit Fund - 6 months 3.40    3.49    3.65
Kiwibank Term Deposit Fund - 12 months 3.50    3.39    3.55
Kiwibank Term Deposit Fund - 150 days 3.15    3.65    3.81
Kiwibank Term Deposit Fund - 120 days 2.95    3.03    3.17
Kiwibank Term Deposit Fund - 9 months 3.40    3.49    3.65
Westpac Term PIE Fund - 150 days 3.00    2.88    3.00
Westpac Term PIE Fund - 120 days 3.30    3.38    3.53
Westpac Term PIE Fund - 18 months 3.50    3.29    3.43
Westpac Term PIE Fund - 12 months 3.50    3.49    3.65
Westpac Term PIE Fund - 6 months 3.30    3.44    3.60
Westpac Term PIE Fund - 9 months 3.35    3.17    3.32
Westpac Term PIE Fund - 90 days 2.75    2.56    2.67
Westpac Term PIE Fund - 2 years 3.70    3.79    3.96
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com