T4 1400 1510 v2

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Making your buildings work better

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T4 1400 1510 v2

  1. 1. Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner
  2. 2. 8.3 Making your buildings work better Chair: Louise Ellison, research director, Investment Property Forum Jon Lovell, head of sustainability, Drivers Jonas Deloitte David Mummery, head of customer services, Legal & General Investment Management David Crump, construction director, Quintain Estates and Development Rachel Candy, group analyst, Quintain Estates and Development Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner
  3. 3. Getting the aim right: Targeting low-carbon intervention to improve investment performance Jon Lovell, Head of Sustainability © 2010 Deloitte LLP. Private and confidential.
  4. 4. Drivers of Sustainable Property 1. FINANCIAL Reducing costs, cash flow stability and optimising profits 2. REPUTATIONAL Differentiation and protection of brand integrity GREATER RESILIENCE 3. LEGAL Ensuring statutory compliance and minimising negative GREATER exposure to environmental regulation COMPETITIVENESS 4. PHYSICAL Managing and abating environmental (climate) risk 5. ETHICAL Promotion of social and intergenerational equity VALUE 6. MARKET Mitigating against the risk of tenant migration and investment DIFFERENTIAL depreciation 4 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  5. 5. Reality Check Barriers to progressive change Awareness Deferred Limited Lack of deficit impacts reporting transparency Low skills base Limited intelligence Lack of Poor leadership measurement Opportunity costs Split INERTIA incentives Capex / Weak Opex tension Suppressed value Confusion and enforcement correlation absence of deterrent Incorrect Mal-aligned Inconsistent Inadequate fiscal policy policy price signals regulation 5 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  6. 6. Anticipated Impact on Value Regulatory impact Likely value implication high base case value erosion (marginal risk) VALUE accelerated obsolescence (significant risk) Source: HurleyPalmerFlatt 2009 TIME Source: Drivers Jonas Deloitte 6 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  7. 7. Fiduciary Duty “…it is the fiduciary duty of trustees and investors to understand and consider sustainable investment issues when looking at investing in real estate.” “…a responsible investment option should be the default position. Therefore, responsible investment, active ownership and the promotion of sustainable business practices should be a routine part of all investment arrangements, rather than the optional add-on...” 7 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  8. 8. Investment portfolios From benchmarking to intelligent portfolio strategy How do our Ratings • Proportion of capital value assets BASE CASE Benchmarks • Exposure of rental income perform? Management • To what standard? How can they OPTIONS Refurbishment • Net CO2 savings be improved? • At what (lifecycle) cost? Redevelopment Landlord • Lease provisions Who pays? NET COSTS Tenant • Grant funding opportunities Physical risks • Proportion of ERV What are the • Timing of reversions risks of non- MODEL RISK Compliance risks • Influences on tenant behaviour action? • Availability of better properties Tenant migration risks • Affordability: refurb v relocation What is the impact on TARGETED STRESS TEST OPPORTUNITY investment INTERVENTION Net Present Values adjusted for Improved terms and extended performance? sustainability impacts leases 8 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  9. 9. Theory into practice Preventing Occupier Migration • One of the first Low Carbon Workplaces, A+ working with The Carbon Trust • Renegotiated lease terms – benefits shared A between landlord and tenant • Low Carbon Charter (post-occupancy B evaluation) • 130kg/CO2/m2 50kg/CO2/m2 C • Ensures subsequent fit out does not impact on the refurbishment D E F G Current EPC rating 9 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  10. 10. Theory into practice Preventing Occupier Migration • One of the first Low Carbon Workplaces, A+ working with The Carbon Trust • Renegotiated lease terms – benefits shared A between landlord and tenant • Low Carbon Charter (post-occupancy B evaluation) • 130kg/CO2/m2 50kg/CO2/m2 C • Ensures subsequent fit out does not impact on the refurbishment D E F G Post-refurbishment EPC rating (estimated) 10 Drivers Jonas Deloitte © 2010 Deloitte LLP. Private and confidential.
  11. 11. Thank you jlovell@djdeloitte.co.uk 0161247 7214 11 Deloitte © 2010 Deloitte LLP. Private and confidential.
  12. 12. This document is confidential and prepared solely for your Deloitte LLP is a limited liability partnership registered in England information. Therefore you should not, without our prior written and Wales with registered number OC303675 and its registered consent, refer to or use our name or this document for any other office at 2 New Street Square, London EC4A 3BZ, United purpose, disclose them or refer to them in any prospectus or Kingdom. Drivers Jonas Deloitte is a trading name of Deloitte other document, or make them available or communicate them to LLP, which is the United Kingdom member firm of Deloitte any other party. No other party is entitled to rely on our document Touche Tohmatsu ('DTT'), a Swiss Verein, whose member firms for any purpose whatsoever and thus we accept no liability to any are legally separate and independent entities. Please see other party who is shown or gains access to this document. www.deloitte.co.uk/about for a detailed description of the legal structure of DTT and its member firms, the United Kingdom member firm of DTT. © 2010 Deloitte LLP. Private and confidential.
  13. 13. Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner
  14. 14. Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner
  15. 15. Quintain Estates and Development PLC Making Buildings better Rachel Candy David Crump
  16. 16. Enhanced Business Performance Attracting & Maintaining Tenants • Lower Energy Costs Higher Rents & Shorter Voids Improved Tenant Quality • Blue Chip Tenant Sustainable Policies & CRCs • Improved tenants Higher Values Establish Credentials of Location • Future Proof Buildings Higher Values Improved Cashflow and Values Value Additive or Defensive Quintain Estates 080605 and Development PLC
  17. 17. How Green is Green ? - What Do We Target ? • Exceed Regulation for Carbon in Use • Target: BREEAM Excellent for Offices • Target: CSH level 4 for Residential • Other Development Measures • Reduce Embedded Carbon in Construction Materials • Reduce Construction Material Landfill • Opportunities for District-wide Measures • Green Lease Quintain Estates 080605 and Development PLC
  18. 18. Location
  19. 19. 14 Pier Walk
  20. 20. Sustainability systems
  21. 21. Carbon Emissions 150 125 kgCO2/m 2 100 75 50 25 0 Typical Good Practice Block B Block A Comparison of Buildings A & B to Benchmarks
  22. 22. Greenwich Peninsula: 14 Pier Walk & 6 Mitre Passage • Speculative Office Development • BREEAM Excellent • Attracted Public Sector Tenants • High Aspirations for Sustainability • No Void at 14 Pier Walk • 2 Floors let at 6 Mitre Passage • Establish Greenwich Peninsula as a Green Office Location Quintain Estates 080605 and Development PLC
  23. 23. 14 Pier Walk - Green Lease Ground Source Heat Pump • Tenant & landlord share maintenance responsibility • Tenant covenants to use as intended A Commitment to Provide CHP within 5 years Water Efficiency Measures • Tenant covenants to use as intended Waste Management • Tenant commits to work to a waste minimisation plan • Pre-sorting of waste • Co mingled recyclables • Glass • Food waste • Black bag (landfill) Tenant commits to share data - energy, water and waste Quintain Estates 080605 and Development PLC
  24. 24. Envac 49
  25. 25. Envac
  26. 26. Thank you
  27. 27. Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner
  28. 28. Text conference speakers on 88020, preface your message with base4 txt tools – Official SMS Partner

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