How the CEFC Invests in the Property Sector

Australia’s largest “green bank”, the Clean Energy Finance Corporation, is taking a leading role in clean energy projects across the property sector by investing in a range of emissions-reducing initiatives.

The federal government agency has committed almost $2 billion to commercial and residential property to help cut emissions by 250,000 tonnes a year—the equivalent of removing 53,000 cars from the road.

The built environment uses more than 50 per cent of Australia’s electricity, and the construction, operation and maintenance of buildings accounts for almost a quarter of all greenhouse gas emissions.

While the property sector has the potential to reduce emissions by 69 per cent from 2005 levels by 2030, it is on track to achieve just an 11 per cent reduction under current policy settings.

How the CEFC invests

The CEFC works with investors to help raise clean energy standards across the built environment by supporting market-leading emissions solutions.

“We commit to demonstration projects to help prove the benefits of investing in best-in-class performance around energy efficiency and the integration of renewable energy into new and existing buildings,” CEFC executive director Rory Lonergan said.

“Our investments also ‘crowd in’ other environmentally-aware investors seeking projects with enhanced sustainability standards.”

The CEFC is working with Mirvac as it plans to develop clean energy masterplanned communities, as well as create a low emissions build-to-rent investment platform.

The CEFC has also committed $100 million in finance for Cbus Property’s Collins Arch project—which includes 7-star NatHERS apartments—and helped Cromwell Property Group cut emissions by more than 50 per cent than current building requirements at its LDK Greenway Seniors’ Living Village in Canberra.

The CEFC has invested in the hotel sector to assist Pro-invest develop and operate up to 15 new hotels aim for a 5-star NABERS rating—helping cut as much as 25 per cent of its energy consumption.

The CEFC has backed community housing providers SGCH and Housing Plus develop 700 homes with 7star NatHERS ratings and committed $120 million in finance for Curtin University’s Exchange innovation hub.

In commercial property, the CEFC has invested in QIC’s Shopping Centre Fund, Lendlease’s Australian Prime Property Fund Commercial and Investa’s Commercial Property Fund in exchange for improvements in energy efficiency across their respective property portfolios.

AMP’s Capital Wholesale Office Fund has committed to support net zero emissions by 2030, while Dexus’ Healthcare Wholesale Property Fund is targeting emissions reductions of 45 per cent in new and existing buildings.

Why property-related emissions matter

CEFC executive director Rory Lonergan says that energy efficient buildings support a least-cost pathway to net zero emissions.

“The CEFC is responsible for investing $10 billion in clean energy projects on behalf of the Australian community—and our investments are tackling some of Australia’s toughest emissions challenges right across the economy,” Lonergan said.

“When it comes to property, our targeted debt and equity investments are unlocking high-impact and cost-effective sustainability solutions.

The $10 billion federal government agency is active across all property sectors including office, retail, residential, aged-care, student accommodation, social and affordable housing, healthcare and hotels.

“High-performing buildings have lower operating costs and reduced exposure to volatile energy prices,” Lonergan said.

“Building with stronger ‘green’ credentials are also likely to be more attractive to tenants and buyers, leading to higher valuations. Importantly, investors are looking for ESG opportunities, such as those available across the property sector.”

Sustainable Cities Investment Program

CEFC investment commitments in the built environment are part of its Sustainable Cities Investment Program, which is accelerating the development and deployment of a broad range of clean energy projects in Australia’s 50 largest cities.

The CEFC also has a strong focus on sharing the learnings from its investment commitments across the industry. It collaborates with major industry bodies with a shared sustainability focus, including PCA, GBCA, ASBEC, NABERS, ClimateWorks Australia and GRESB.

To learn more about the CEFC’s investment in the property sector, click here.

The Urban Developer is proud to partner with CEFC to deliver this article to you. In doing so, we can continue to publish our free daily news, information, insights and opinion to you, our valued readers.