Aging office stock to be given a new lease on life through newly announced brown to green joint venture
New green to brown joint venture to refurbish aging office buildings. Image: Canva.
  • Joint venture to turn transform aging office stock into sustainable high quality assets
  • Venture partners boast proven track record in sustainable development
  • Refurbished portfolio to be fully electric and have a five star NABERS rating

Built, an Australian construction, and development group, and Investa, an Australian investment manager, have unveiled a new Sustainable Adaptive Reuse joint venture. Their venture focuses on repurposing old non-Environmental, Social and Governance (ESG) certified office stock in the Central Business District (CBD) into sustainable top-quality A-grade assets.

“We are delighted to work together on this venture signifying the coming together of two leaders in their fields, says Chief Executive Officer of Investa, Peter Menegazzo.

“Repurposing ESG-obsolete assets to create bespoke, high quality and amenity-rich workplaces with leading ESG credentials for forward thinking employers to occupy is a theme we strongly believe in both from an occupier and investor perspective.”

A second lease on life for older buildings

The brown-to-green venture presents an exciting opportunity for investors to acquire, unlock, and recast existing secondary assets, capitalising on the trend of Australian buyers and tenants showing increasing demand for ‘green’ buildings. For owners of ageing, low-grade stock at risk of devaluation due to investors moving towards high-quality, sustainable properties, the venture may feel like a lifeline.

“Owners who have not invested in their assets, or who have held onto low grade stock, face both asset devaluation as well as asset obsolescence. It is here where the venture will focus.”

Peter Menegazzo, CEO of Investa

“This theme is resonating strongly with investment partners, with a number of investors actively engaged in reviewing opportunities.”

The venture utilises the impressive sustainability track record of the two firms, including Built’s experience in unlocking complicated heritage redevelopments and Investa’s renowned integrated property platform and development capacity.

“We’ve proven the success and increased demand for a new ‘Brown to Green’ approach through our own experience with boutique developments like Sub Station No. 164 which saw the conversion of two disused heritage industrial buildings into a contemporary, character-laded, 6-Star Green Star office tower,” says Brett Mason, CEO and Managing Director of Built.

Sub station No.164
Sub station No.164. Image: Built.

“Not only did the retention of the original buildings in construction reduce embodied carbon by 23% in comparison to a conventional build, Built also secured an international fund partner and fully leased the building during Covid and challenging economic conditions showing the market demand for these types of assets.”

Around 80% of older office buildings will continue to be used in 2050. Hence, for Australia to meet its net zero carbon emission targets, 3% to 3.5% of all commercial office buildings must be transformed into sustainable assets every year.

Thus, the Sustainable Adaptive Reuse joint venture is a turnkey solution to Australia’s sustainability challenges and an additional option for creating top-grade commercial office assets. It aims to lower embodied carbon, which refers to emissions associated with building construction, by 40%.

Additionally, all assets in the portfolio are expected to be fully electric and to have a weighted average National Australian Built Environment Rating System (NABERS) rating of five stars. NABERS is a rating system used in Australia to judge buildings’ energy efficiency and environmental performance. NABERS describes a five-star rating as excellent, while a six-star rating is market-leading.

The buildings will boast net zero Scope 1 and Scope 2 emissions, meaning that the emissions produced by the assets directly, and the emissions created by the energy the building uses, will have net zero emissions. Other quality and performance certifications that the assets are expected to hold include Green Star and Well.

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