As sustainability becomes a priority in Australia’s built environment, shopping centres, which can be known for their substantial energy and water demands, are increasingly encouraged to reduce their environmental footprint. Improved sustainability performance not only contributes to environmental progress but also yields considerable benefits for shopping centre owners, investors, and operators.

One powerful tool supporting this shift is the National Australian Built Environment Rating System (NABERS), a government-backed program that assesses a building’s sustainability performance. With potential regulations on the horizon that could make NABERS ratings mandatory for shopping centres, understanding and leveraging these ratings is more important than ever.

1. Lower Operating Costs and Increased Efficiency

One of the most immediate benefits of improving a shopping centre's NABERS rating is the potential for reduced operating costs. Energy-saving initiatives, such as LED lighting, advanced HVAC systems, and solar installations, can substantially lower energy expenses, and shopping centres implementing energy-efficient systems could reduce their utility bills by as much as 25%.

A NABERS rating helps identify and highlight these efficiencies, guiding owners and managers in pinpointing where savings are possible.

Even small changes, like regular meter audits, can prevent electricity wastage by ensuring that all power usage is accurately tracked, helping owners save on network charges. So too, researching and identifying relevant government grants for LED lighting upgrades can further enhance savings, particularly in energy-intensive areas like retail car parks.

2. Attracting Environmentally Conscious Tenants and Consumers

Sustainability is now a core value for many consumers, who prefer to support businesses committed to or aligned with their or their organisation’s ESG values and practices. A high NABERS rating signals this commitment, aligning a shopping centre with the values of today’s conscientious shoppers and by showcasing a dedication to sustainability, centres can attract not only a loyal customer base but could increase its portfolio of premium tenants.

Retailers themselves increasingly seek spaces in eco-friendly centres that support their corporate sustainability goals. A strong NABERS rating can differentiate a centre in the competitive leasing market, boosting occupancy rates and tenant retention, both of which contribute to long-term profitability.

3. Enhanced Indoor Environmental Quality

Indoor Environmental Quality (IEQ) is a component of NABERS that looks at factors such as air quality, lighting, and thermal comfort. For shopping centres, investing in these areas has a direct impact on both visitors and employees, improving their overall shopping experience, as well as their well-being. Enhanced ventilation, effective noise reduction, and comfortable temperatures not only make the shopping environment more enjoyable but can also (positively) influence the time customers spend at the centre, impacting sales for tenants. A high NABERS IEQ rating can set a shopping centre apart, emphasising a focus on shopper comfort that is likely to lead to increased customer loyalty.

4. Environmental Impact and Industry Leadership

With Australia’s commitment to net-zero emissions by 2050, every industry is expected to contribute and commit to reducing its greenhouse gas emissions. Shopping centres that achieve high NABERS ratings actively support this national goal, adopting practices that cut energy and water usage while reducing waste and emissions.

High NABERS ratings in areas like energy, water, and carbon emissions indicate a centre is leading in sustainability efforts.  A centre with a high NABERS water rating, for instance, may have implemented water-saving technologies, while a strong carbon rating shows an emphasis on reducing emissions, potentially through solar power or efficient infrastructure upgrades.  This leadership in sustainability not only fulfils an environmental responsibility but also encourages other businesses to adopt similar standards, fostering a broader culture of sustainability within the retail sector. 

5. Future-Proofing and Regulatory Compliance

 Australia is moving toward stricter sustainability regulations, and it’s likely that NABERS ratings will eventually become mandatory for shopping centres. By proactively achieving a high NABERS rating ahead of these introductions, shopping centres can avoid the costs and operational disruptions of future retrofits required to meet regulatory standards. In addition, properties with high NABERS ratings are better positioned to adapt to future policy changes, reducing compliance risks and enhancing long-term resilience.

Shopping centres that embrace sustainability through NABERS ratings are also more attractive to investors and buyers, many of whom now prioritise ESG factors. A strong NABERS rating provides these stakeholders with reassurance that the property is managed sustainably and aligned with global trends in environmental responsibility.

6. Boosted Marketability and Reputation

A NABERS rating is a tangible measure of a shopping centre’s environmental performance, serving as a powerful branding tool. Centres with top sustainability ratings can leverage this distinction in marketing campaigns, social media, and public relations efforts. Promoting a centre’s commitment to sustainability helps to attract an eco-conscious clientele, enhance brand visibility, and strengthen the centre’s market position.

For owners and operators, a high NABERS rating contributes to an enhanced reputation that is increasingly valuable as ESG principles become a major focus for investors. A high rating conveys the property is not only well-managed but also part of a global push for environmental accountability, increasing its appeal and potentially justifying premium rent levels.

7. Increased Property Value and Investor Appeal

Sustainably managed properties with high NABERS ratings can experience long-term value appreciation. As demand for green buildings continues to rise, investors are often willing to pay a premium for properties that demonstrate high environmental performance. Studies have shown that green buildings typically benefit from higher occupancy rates and reduced vacancy periods, further bolstering their financial viability.

By achieving a high NABERS rating, shopping centres can future-proof their value, ensuring they remain competitive and desirable assets even as the market shifts toward sustainability. Centres with strong environmental credentials are not only more efficient but also more attractive to potential buyers and investors, providing a critical advantage in an eco-conscious real estate market.

For centres looking at ways they can work towards or improve a NABERS rating, there are several practical and effective strategies available to them:

• Energy audits and monitoring - conducting regular audits helps track energy use and identify inefficiencies, with meter audits being a particularly cost-effective option.
• Solar power and renewable energy - installing solar panels can significantly reduce reliance on grid electricity, especially if set up for optimal energy capture.
• Efficient HVAC systems and thermographic film - upgrading HVAC systems and applying thermographic film to glass structures, such as atriums, can lower cooling costs and improve energy efficiency.
• Power factor correction units - These units help reduce network charges based on HVAC setups, allowing for additional energy savings.
• LED lighting and government grants - upgrading to LED lighting in areas like car parks and exploring government grants to offset costs can enhance sustainability while lowering utility expenses.
• Temperature and lighting control - installing sensors to optimise lighting and HVAC usage based on accupancy helps prevent energy wastage in common areas.

Achieving a high NABERS rating offers Australian shopping centres a compelling array of benefits, from reduced operating costs and regulatory preparedness to improved marketability and enhanced property value.

As environmental awareness grows, centres that invest in sustainabilty practices are better positioned to meet the expectations of today's consumers, tenants, and investors - by focusing on NABERS ratings, shopping centres can not only improve their environmental footprint but also gain a competitive edge, creating a positive impact for both their business and the planet.

Disclaimers:

The postings by any individual on any blog do not necessarily represent the position of Savills, its strategies or opinions.