LETTER FROM THE EDITOR: For years, we’ve suspected that real estate agents hold the keys to the universe when it comes to real estate results and sustainability. Meeting the Colliers sustainability team in Sydney late last week finally turned that suspicion into conviction.
A reasonable person might have thought, with a high degree of reason and logic, that the people who drive more sustainable buildings are the developer, investor, architect or engineer.
But after many years of discussions with agents, it became clear that it was the agents who pulled the purse strings. So: if the new building absolutely needed floor-to-ceiling windows, central service cores or an open plan (perhaps with the core on the side), what finishes and colors to use, what materials and what type performance profile he needed in terms of technology and possibly environmental measures.
Because it’s the guys and girls who have their ears glued to the ground. People with the hyper-tuned antennae their high-pressure jobs depend on for success.
They need to know not only what the current rents are – both the “headline” rents, i.e. what is publicly declared, and the “effective” rents, i.e. what will to bank account after cash back and cost of new fit out etc. is deducted.
They also need to know what the competition is in terms of other tenants and new developments.
Additionally, the prevailing winds of change in the consumer market that could drive the viability or desirability of that particular office product.
And they need to know everything three or even five years in advance, because the construction of a large office building (or any important structure) takes a long time to come to market.
We know from the work of Cristian Criado Perez at the University of NSW that evidence-based decision making does not come into play – he has interviewed 1000 developers, builders, architects and engineers and most of them they said the decisions were based on what the guy on the road had built. “We will have what he has”, in other words. Change in the world of real estate is indeed gradual.
The good news is that Agents who just a few years ago would fidget uncomfortably if you mentioned sustainability and the Green Star are finally hearing the siren call of a greener world. The smartest ones have initiated this change of mentality which catalyzes a revolution more important than the industrial revolution.
Customers should be careful
It was a boost of optimism to meet the sustainability team at Colliers who are helping to solidify this change.
Lisa Hinde has been responsible for sustainability at Colliers for more than a year after nearly
Lisa Hinde served as Sustainability Manager at Colliers for over a year after nearly seven years at JLL (including various GBCA committees in between), and Simon Ng, who spent eight years full-time at GBCA and has engineering training. And that was encouraging because these two aren’t going to invent pretty green fluff, because they know what’s under the hood and what needs to be installed there.
Our conversation also did not include the Australian Consumer and Competition Commission’s significant increase in interest in greenwashing.
What Hinde and Ng pointed out is that there is an increasingly serious contribution from the sustainability team to support the agency side of the business when it comes to dealing with customers. and what they need, whether they are tenants, developers or investors at the start of projects.
And customers should pay attention to the advice.
They don’t want to be caught off guard like a developer was when a corporate tenant with a dire need for a new HQ asked about ESG strategy only to be greeted with a blank stare…and quickly taken the exit “Goodbye Charlie”.
Hinde said his team is helping with emerging concepts around sustainability, including “the new language around electrification, around Indigenous engagement, around different methods of communicating with tenants, transparency.”
This also includes the area of digitization which comes into play and which can only be established at the very beginning of a project, she says.
“So when that brief is then released to all parties after that initial launch, those members of the project team know exactly what the intent of that building is from the get-go. It is not modernized at the end.
The agent paints a picture of what the development could yield in terms of both money and benefits. And it is this, says Hinde, that is “the most streamlined and effective way to introduce really relevant and really important ESG or ESD credentials into this development. Because then you’re not fighting the backrest as you work along the chain.
She compares them to an insurance agency.
“They tend to know exactly what’s going on in the market at the time. And so they adapt and can be very, very nimble with the new demands that come. The same way insurance agencies need to keep abreast of all these new trends, all these new requirements, just to make sure their claims and their policies have been priced and delivered correctly.
“Letting agents look around, hear about the prescriptive measures that are, in the eyes of their occupants, a standard or a minimum expectation [for] these new premium assets. Or if it is a repositioned asset, what are the expectations. »
New First Nations Engagement Standards
The way she says her team’s role is to help the agency team “translate some of the new standards that are coming out, whether it’s embodied carbon or proper Indigenous engagement.”
On the latter, there were some good examples and some “not so good” or inappropriate ones. By that, she means things like works of art, which can veer too close to symbolism.
“I mean, works of art are very important, but just making works of art, and nothing else, is not really the intention of a reconciliation process. And so the good ones, you know, do the artwork, do the cultural engagement, do the ongoing procurement engagement with the Indigenous parties.
She thinks the appointment of the much-loved Jodie Taylor as Managing Director of the Indigenous business group Supply Nation (and previously with International Towers in Barangaroo) is a great move that should improve results in this area.