Leading property development and asset management group Salta has secured the first NAB Green Finance for Commercial Real Estate (CRE) loan for a building in Victoria.
The building, a mixed-use office and retail project called Industry Lanes in the inner-Melbourne suburb of Richmond, qualified for the loan because of its low emissions.
NAB Group Executive for Corporate and Institutional Banking Cathryn Carver said demand for energy-efficient commercial properties was growing, with the sector accounting for about 25 per cent of overall electricity use and 10 per cent of the nation's total carbon emissions.
"The technologies needed to enable decarbonisation (in the CRE sector) are available today," Ms Carver said.
"Australia's commercial real estate market is primed and ready to transition.
"Industry Lanes is a prime example of how the property industry can make real progress with its decarbonisation strategies, and we look forward to our continued relationship to support Salta's sustainability-led projects in the future."
A report last April by consultancy firm EY said that Australia could not achieve net zero without the real estate sector, because the net-zero buildings of 2030 were being designed today and would be sold, leased and occupied tomorrow.
The report said new regulatory developments and reporting standards were changing the way companies looked at commercial space and market valuations for green buildings.
Standards for disclosure of sustainability and climate-related financial information, effective for some annual reporting periods from January 1, 2025, would make climate, emissions and sustainability a part of business strategy, key risks and opportunities.
Sign-off from auditors would be required for climate disclosures, introducing a new level of scrutiny and handing overall responsibility to the chief financial officer.
An EY survey found that 92 per cent of corporate tenants were more likely to stay in a property if it had strong green credentials and were more likely to pay a green premium.
While energy and emissions reduction were previously seen as part of efforts to reduce costs and increase efficiency, the firm said the focus was now shifting from cost to value.
"Buildings are responsible for a quarter of Australia's emissions, but they are also among the lowest hanging fruit of emissions reduction," EY said.
"Our research finds tried-and-true technologies can do most of the heavy lifting of emissions reduction in buildings."
The sustainability features of Industry Lanes included air-cooled heat pumps for heating, ventilation and air conditioning, rainwater collection and storage, Co2 sensors for improved ventilation, and motion sensor controls for lighting public areas including amenities, lobbies, car parking, and for back-of-house areas, plant rooms and stairwells.
A responsible materials approach also saw steel and brick sourced from pre-existing assets and adapted back into the new development.
The features helped Industry Lanes quickly attract high-calibre tenants, with the project now 98 per cent leased.
They also enabled the project, co-owned by Salta and Abacus Group, to achieve a 5-star Green Star rating from the Green Building Council of Australia, reflecting its sustainability performance, and 1-star Fitwel Multi-Tenant Base Building rating, with the latter assessing the impact of the building on human health and well-being.
Salta ESG (Environmental, Social and Governance) Director Nikki Paton said the company's ESG pillars of healthy and connected people, climate action & resilience, nature positive and equity for all were being positively received by its stakeholders.
"As a private developer, we are pleased to meet and exceed many industry ESG benchmarks within our assets. Salta were early adopters of sustainable development - having been members of the Green Building Council of Australia since 2007," Ms Patton said.
"We've also established a minimum requirement that all new Salta projects over 4,000sqm achieve a 5-star Green Star certified rating.
"We are pleased to have received this finance from NAB, and look forward to continuing to prioritise the development of ESG-focused buildings within our growing multi-sector pipeline."
Disclaimer -
To qualify for NAB Green Finance for Commercial Real Estate, a project needs to satisfy NAB's eligibility requirements for NAB Green Finance for Commercial Real Estate, which are subject to change, and NAB may apply discretion when assessing applications and reserves the right to decline applications even where NAB's eligibility criteria are met. This is in addition to NAB's standard eligibility, lending and credit approval criteria."
