South Australian legislation to sustainably retrofit commercial property
The South Australian government has opened up public consultation on legislation that would allow for a new loan scheme to help retrofit commercial property with sustainable infrastructure in order to help improve energy, water and environmental efficiency.
Sustainability, Environment and Conservation Minister Ian Hunter said the Building Upgrade Finance scheme was being created to help overcome a number of obstacles that can prevent environmentally friendly upgrades from being achievable by commercial building owners.
"They also struggle to overcome the ‘split-incentive’ barrier in leased buildings, which arises when the tenant enjoys the benefits of the upgrade in the form of reduced utility costs, but the building owner has to bear the capital costs of the improvements," said Mr Hunter in a January 30 statement.
"The Building Upgrade Finance (BUF) scheme will allow the loan to be tied to the property itself rather than to the property owner, with loan repayments collected via a local government charge levied on the property and passed on to the financier."
Mr Hunter went on to say these developments have the silver lining of also providing jobs for the local area while stimulating investment and economic growth in the South Australian property industry.
"We also see it creating opportunities for the clean technology sector, improving the quality of our building stock, mitigating the impact of rising energy and water costs on business, and delivering a range of environmental benefits including reduced greenhouse gas emissions," said Mr Hunter.
The Property Council of Australia has supported the move, stating the decision was a huge step forward for the state, as well as property owners and developers in the region.
Executive Director for the Property Council South Australia Division Richard Angove said the decision would help to create a more sustainable environment in the state.
"Buildings and businesses that are energy efficient are more financially secure and better able to maximise growth opportunities," said Mr Angove in a January 30 statement.
"South Australia has a large proportion of existing buildings in need of significant retrofitting. Enhancing energy efficiency is no longer just about new green buildings, but importantly about greening the existing built environment."
This could provide a great opportunity for the owners of commercial real estate in South Australia to adopt a more sustainable approach to their property and help do their part to make Australia a cleaner, greener nation.