Capturing New Growth from Sustainability

Most strata management firms are operating on fine margins from base fees and are unable to capture the scale benefits enjoyed by larger Australian firms and U.S. based “mega-lot” managers. 

Five years ago, sustainability was simply viewed as cost by Owners Corporations. A dangerous territory for the bravest of strata managers to tread unless hounded by their 'eco-greeny-composting-lycra-cycling' Chairperson.

A tragic end to FY16 saw some states experience 250% wholesale electricity price rises. That annual discussion with a bulk-buy broker is no longer enough to keep scheme utility costs under control. Australian gas exported to Japan is now cheaper for our Nippon neighbours than local strata schemes. Surprised? You can read more on how the gas cartel is holding the nation to ransom.

​The problem has always been, how to run upgrade projects in schemes when most strata managers don’t have in-house project management skills or the time to attend to anything which doesn’t stop the phones from ringing.
 
However, there is now a new lexicon in the built environment which higher profit strata firms are picking up on – RESILIENT HOUSING.

Rather than driving sustainability initiatives, the conversation is now about future-proofing our strata schemes against the assault of the second highest utility costs in the developed world. This is the approach which was used by Jamesons Strata at 1-3 Botany Rd. (Strata Plan 68853).

The result saw the building receive the Strata Owners Community Engagement Award given in 2014. They then backed this up by winning the Strata Owners Environmental Award in 2016 following install of LED Lighting and Solar Panels at the CHU Strata Community Australia (NSW) Awards night.
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Thankfully, over the past 5 years the supply chain of products ranging from LED lighting to heat pumps to solar panels got smarter.

Off-the-shelf solutions with in-built project management and even finance options made the whole proposition simpler.  A strata manager can now be proactive, without suffering the downstream pain.

This allows the Strata Manager to drive fulfilment of the resiliency upgrades at higher margin than previously possible. Copying the insurance model for existing schemes OR positioning differentiated service levels when pitching new business. Most incumbents don’t have RESILIENCE plans in place for their buildings making them sitting ducks for the competition when it comes to new scheme shoot-outs.

Either way, the ‘S’ for sustainability is gone but the ‘R’ for Resilience is here to stay.
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For further reading see Macquarie Bank's report on Capturing New Growth, the 2016 Strata Benchmarking Results.

Also see how solar might benefit your building as a sustainability initiative, Smart Blocks Case Study: Install Solar for common areas.

Brent Clark
Contributor, Strata Energy News