sustainability & real estate
Post on 19-Oct-2014
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Sustainability & Real EstateTRANSCRIPT
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SUSTAINABITY AND REAL ESTATE
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“It doesn't ma3er if you believe in global warming or not. Successful leaders must address what is important to occupiers of space. More efficient use of space, greater producFvity in be3er quality space and lower energy costs ma3er to all those who fear obsolescence.” Source: The Journal of Sustainable Real Estate
SUSTAINABILITY DRIVERS
• Resource Scarcity • Cost Increase • Gov. IncenFves
• Market ExpectaFons • Property ValuaFon • Revenue GeneraFon
Sustainability Drivers
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PROPETY OWNERS & INVESTMENT MANAGERS
80% Are interested in the sustainability performance of the properFes they invest in
84% Report that tenants are becoming more demanding in terms of wanFng sustainable space
72% Have implemented formal sustainability policies at the fund level
68% Evaluate the sustainability of an investment during the acquisiFon phase
76% Feel there is a value difference between a sustainable and non-‐sustainable building
16% Evidenced that sustainability directly contributed to a rental premium
SUSTAINABILITY & REAL ESTATE
Source: Cushman & Wakefield. Property owners and investment managers survey results. 2013
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SUSTAINABILITY AT A GLANCE
Source: Adapted from Sands ECO360° Global Program
• Cost Savings
• Revenue Increase
• Healthier Bo3om-‐line
• Higher ValuaFon
• Be3er Corporate Image
Successful ImplementaJon
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GREEN BUILDINGS
• Environmental Leadership
• Water and Energy Efficiency
• Voluntary Building CerFficaFons
• Clean Technologies
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RESPONSIBLE OPERATIONS
• Sustainable Purchasing Policy • Waste Management Programs
• Efficient Air CondiFoning System
• Water and Energy ConservaFon
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STAKEHOLDER ENGAGEMENT
• Environmental Reports
• Engagement of Emlpoyees
• Corporate Social Responsibility
• CollaboraFon with Local Community
• Voluntary CerFficaFons
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BIG PICTURE: SUSTAINABILITY TREE
Sustainability
Green procurement
Use of cerFfied products
InnovaFons
Development & RenovaFons
Environmental protecFon
Waste and CO2 management
Stakeholder engagement
ReporFng
OperaFng efficiency
Energy & Water efficiency
AcFon plan Benchmarking
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Determine objecFves for an asset / porholio
Understand goals for the exisFng financial performance & future value of the investment
Recommend acFons based on financial goals and objecFves for an asset / porholio
Align sustainability and with financial strategy
Create P&L projecFons
Implement a scope of work for the asset/porholio
Assess the results
APPROACH TO INVESTMENT
Owner’s ObjecJves
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2
3
4
5
6
7
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SUSTAINABILITY MANAGMENT
.
Benchmarking • Define baseline parameters for facility performance • Establish key uFlity metrics • Compare with industry standards
AudiJng • Review of facility performance (energy, water, and waste) • IdenFfy opportuniFes for uFlity cost savings • Assessment of future results (ROI, NPV, Payback) & recommendaFons
ImplementaJon • Modeling, planning, project management, • Financing, procurement
Results Assessment • Results review • ReporFng • Adjustments
( ON A PROPERTY LEVEL )
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SUSTAINBILITY AND PERFORMANCE
To increase the return for shareholders
Strategy AcFon plan Performance measures Budget Employee
performance
Corporate
level
Division Level
Property Level
Sustainability Balance Scorecard Strategic Planning
Performance BudgeFng
Employee Accountability
Aligning financial goals with sustainability strategy by using
Balanced Scorecard and a cascading model
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Summary of Financial Performance by Property and Company Measures to
Implement Annual Saving
EsJmated Project Costs
Simple ROI IRR NPV
No cost (operaFonal adjustment)
-‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐
Low cost (funding from exisFng operaFonal budgets)
-‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐
CapEx (external and internal funding)
-‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐
Combined Impact -‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐ -‐-‐-‐
SOURCE: THE TABLE WAS ADAPTED FROM AN HVS’ PROPERTY UTILITY AUDIT AND CAPITAL PLANNING REPORT
MEASURING FINANCIAL PERFORMANCE
Goal EsFmate an impact of conservaFon measures on operaFonal profitability and overall financial performance
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SUSTAINABILITY GUIDELINES
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MAKE SUSTAINABILITY AN INTEGRAL PART OF THE BUSINESS
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Triple BoYom Line
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About the author: Vadim Kostyukhin graduated from Cornell Hotel School with a major in Real Estate Investment and Finance and from University of Hawaii at Manoa with an MBA in Management. A civil engineer by trade and professional manager, he has been focusing on the issues of sustainability since 2005. Currently, he is working with Alternaty Real Estate, Vietnam, as a freelance consultant and a co-‐founder of two new businesses. Contact informaFon: [email protected] Mobile (Global) +1 339 674 0454