On August 14th, the BraveGen team joined sustainability leaders and industry experts at the Green Property Summit 2024 in Auckland. We were proud to be event exhibitors supporting the New Zealand Green Building Council (NZGBC) and their ongoing leadership driving building performance in Aotearoa.
The event was infused with a powerful 'mana wave', a symbolic Māori gesture of goodwill and luck, that enveloped all attendees, setting a tone of unity and purpose.
This shared sense of connection and commitment underscored the summit's central theme: the built environment urgently needs a comprehensive plan for carbon reduction strategies.
With the sector responsible for 20% of the country’s emissions, discussions at the Summit concentrated on how new regulations, performance standards, and innovative solutions can propel the transition to a low-carbon future.
For those who couldn't attend, don't worry, as we've summarised some key takeaways below.
Building Code improvements aligned with the Zero Carbon Act.
One of the most significant shifts discussed was the alignment of building codes with the Zero Carbon Act. Two main initiatives stood out:
- Energy Performance Certificates (EPC) and NABERSNZ ratings: These are set to become standard for commercial buildings and homes, providing a clear metric for energy efficiency and carbon performance. For developers and property owners, this means a new level of transparency and accountability, pushing the market towards greener buildings.
- Electrification: The push to electrify both residential and commercial properties is another step toward reducing emissions.
The cumulative impact of these changes is expected to slash over 6 million tonnes of CO2 equivalent (TCO2e) by 2030. These changes are not just about compliance; they represent a major opportunity to reduce energy demand and emissions across New Zealand.
The future of environmental regulation in New Zealand.
As New Zealand continues to evolve its regulatory framework, the influence of European standards is becoming more apparent. Several key international policies could reshape the local market:
- Taxonomy - Europe: This classification system for environmentally sustainable economic activities may affect the real estate sector by narrowing the buyer pool and limiting greenfield development.
- Minimum Energy Efficiency Standards (MEES) – Great Britain: With upcoming requirements for properties to achieve higher EPC ratings, New Zealand could see similar pressure to elevate energy efficiency standards, potentially leading to significant capital costs for property upgrades.
- Whole life-cycle carbon policy – London, England: This policy requires developers to consider and reduce emissions throughout a building's life cycle, adding another layer of complexity to the planning process.
- Sustainable Finance Disclosure Regulation (SFDR) – Europe: This regulation mandates ESG disclosures, which will become increasingly relevant as investors seek clarity on the sustainability of their real estate investments.
- Biodiversity net gain – Great Britain: UK developers must now contribute to nature recovery, either on-site or off-site, which could become a model for New Zealand.
These international standards underscore the increasing focus on sustainability in property development, suggesting that New Zealand may consider adopting similar frameworks, potentially influencing local developers.
The financial upside of Green Building Certificates.
One of the key insights from the Green Property Summit 2024 was JLL's presentation on the financial impact of green certifications in real estate.
Their research, in partnership with NZGBC, highlighted that Green Star-certified buildings in New Zealand command a sales premium of 3.7% to 7.5%.
Properties with both Green Star and a NABERS 5-star energy rating see even greater benefits, with a 9.8% increase in the sale price and a 6.7% rental premium, along with occupancy rates as high as 98%-99%.
These findings show the increasing importance of green-certified properties as sustainability continues to drive real estate investment.
As regulations evolve and ESG demands increase, the value gap between certified and non-certified assets is expected to widen, making green certifications a mark of sustainability, and strategic financial advantage for investors and property owners alike.
Beyond the rating: What comes next?
One critique echoed throughout the Summit was that while obtaining a rating is a crucial first step, there’s often little guidance on what comes next. This is where ongoing performance monitoring and adaptation come into play.
- Green Star Lifecycle: It’s important to distinguish between Green Star design and as-built ratings. A building might meet all the standards on paper, but the true test is how it performs in real life. Performance ratings, such as those evaluated by the Global Real Estate Sustainability Benchmark (GRESB), are becoming increasingly important for investors who want to ensure long-term sustainability.
- Market differentiation: The difference between buildings that achieve these performance ratings and those that don’t is becoming more pronounced. Premium buildings with both Green Star and NABERSNZ ratings command higher rental yields and greater market value, making sustainability an ethical and financially savvy choice.
Looking ahead.
As we move forward, the real estate industry in New Zealand will need to embrace these changes, not just to comply with emerging standards but to lead the way in creating a more sustainable future. The Green Property Summit 2024 highlighted the path ahead, but the journey will require collaboration, innovation, and a commitment to continuous improvement.
For property developers, owners, and investors, the message is clear: the future of real estate is green, and those who adapt early will reap the rewards. As more buildings transition from design and as-built ratings to performance metrics, the importance of ongoing monitoring and adaptation cannot be overstated.
At BraveGen, we’re committed to supporting this transition by providing the tools and expertise needed to navigate this complex landscape. Whether you're at the beginning of your sustainability journey or seeking to improve your building's performance, our team is here to provide guidance and support every step of the way.
