NABERS Promotes Strata Investment Returns
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5th September 2016
Everybody Needs Good NABERS
On the 23rd August, the Federal Government announced its commitment of funds to develop the rating scheme NABERS, for apartment blocks. 

In strata, this will increase the financial benefits gained from efficiency upgrades, driving improvements in the environmental performance of residential apartments.
NABERS is a rating scheme that measures the environmental performance of buildings, and has been used successfully in commercial buildings for over 10 years.

So if strata buildings will soon be judged based on their environmental performance, how do we improve our environmental performance? And what is the cost?

For many investors and apartment owners alike, there is a strong belief that sustainability comes at a cost to investment return and profitability. Research indicates that the opposite may in fact be the case, that investments that have higher environmental performance have lower costs and better financial performance. Additionally, buildings with better environmental efficiency command significantly higher rents and provide better building valuations.
 
In strata buildings, upgrades to LED lighting, ventilation improvements, or water saving projects are fairly standard, and can provide payback periods of between 2 and 3 years through significantly reduced energy and water bills. That’s a return on investment of 30 to 50% per annum. Solar power typically offers payback periods of between 4 to 7 years. In investment circles, returns such as these are unheard of.
 
With the introduction of NABERS to strata, the push to have a high rating will drive energy and water efficiency projects, which will lower utility bills and strata levies. Not only this but, based on experience in commercial buildings, it can also result in significantly improved building and apartment valuations.
 
On the other side of the case for improved environmental performance is the benefit to the planet. Since the release of Al Gore’s ‘An Inconvenient Truth’, it has now become widely accepted by World Leaders and Citizens worldwide, that we cannot continue to burn fossil fuels at the rate we have been without significant environmental consequences.
 
Whether you believe we need to save our planet or not, the financial benefits of improving our environmental performance speak for themselves.

For more information see “How NABERS works”.

Scott Witheridge
Contributor, Strata Energy News
 
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