Early adopters use new State-legislated finance deal to upgrade commercial buildings
Business premises at Edinburgh Parks, Salisbury, and in the Adelaide CBD will be the first two commercial buildings in South Australia to undergo environmental upgrades using a new finance mechanism.
The Building Upgrade Finance mechanism helps commercial building owners access long-term loans to improve the energy, water and waste efficiency of existing commercial buildings, undertake upgrades to heritage buildings and install renewables and battery storage.
Through tying an upgrade loan to the property rather the owner, with payments collected by a Council through a charge, the property owner is able to more easily access long-term finance without cash flow uncertainty, freeing up their cash for other investments.
Tenants benefit from reduced utility costs and improved quality and amenity of buildings while the owner gains by having property that is potentially more valuable and more attractive to tenants.
YourDC and the City of Salisbury have entered into the state’s first Building Upgrade Agreement with finance provider Eureka Environmental Upgrade Finance (EUF), the lending division of Eureka-Real Assets, a subsidiary of AXA IM-Real Assets.
Adelaide property developer John Culshaw, owner of Angas Securities House, Eureka EUF and the City of Adelaide have entered into the first Building Upgrade Agreement in the City of Adelaide.
YourDC will use the finance for the installation of a 199kW solar PV unit from ZEN Energy to generate 290MWh of power a year whilst being cash-flow positive every year. The solar energy solution is forecast to deliver electricity to the property at an effective cost of just over 4c per kWh over the life of the system, equating to a rate that is less than 25% of the site's current grid electricity tariffs.
The solar system will reduce the building’s greenhouse gas emissions by 3,728 tonnes, equivalent to taking more than 800 cars off the road.
The owner of Angas Securities House will install a 30kW solar PV unit, an external green wall, upgrade lighting to LED and install a power factor correction system.
Owners often bundle and bring forward works to maximise the efficiencies of the building. Any works that have an energy, water or waste saving, heritage works and renewables and battery storage are included in the program.
Minister for Climate Change Ian Hunter said that these businesses are part of the economic transformation of our state to a high-tech future, underpinned by low-carbon technology.
"Their plans demonstrate how Building Upgrade Finance can unlock great potential for local manufacturers and suppliers of clean technologies.
"This also enables building owners and tenants to share the benefits of the investment in improving environmental efficiency.
"Building Upgrade Finance is one of the initiatives outlined in South Australia’s Climate Change Strategy 2015-2050 – Towards a low carbon economy."
Mayor Gillian Aldridge, City of Salisbury said, "Our city has always been committed to supporting investment and sustainability – and we’re proud to be supporting YourDC’s investment to reduce both their energy costs and carbon emissions. Being the first council in South Australia to enter into a building upgrade agreement is consistent with our desire to be the best place in South Australia to do business."
Salisbury building consortium CEO, Scott Hicks said, "This upgrade is cash flow positive from day one, it was an absolute no brainer for us. Data centres are one of the highest consumers of power per square metre and sustainability is very important to us. This programme means that when the sun is shining our customers’ computers are running on solar."
"Salisbury City Council gets things done. They approve things in a flash, it is a delight to work with them. And we appreciate the vision of the State Government and support of Eureka EUF to bring this scheme to South Australia."
The Lord Mayor Martin Haese congratulated both building owners for being the first South Australians to enter into Building Upgrade Agreements to fund environmental upgrades to their buildings.
"The energy efficiency upgrades that are being installed within Angus Securities House will reduce carbon emissions and energy bills, while also making the building more appealing and comfortable for its tenants," said Martin.
"With Eureka EUF providing 100 per cent project finance, removing the need for upfront capital, building owners will be able to invest in their buildings, stimulating more upgrades to city buildings and helping Adelaide to become a carbon neutral city."
City building owner John Culshaw said, "I am using the building upgrade finance to reduce energy bills, improve building amenity for tenants while delivering environmental outcomes."
"Through this finance mechanism, my project benefited from 100 per cent project finance, removing the need for upfront capital.
"I’m committed to environmental leadership and taking positive action, and these measures are a great example of how commercial office buildings can reduce their energy use and bills through cost effective, sustainable measures."
Eureka Real Assets Managing Director Bob Kelly said, "This is a great outcome for the industry and is a result of great work by a range of parties from all levels of government, the work of the early adopter program led by C Minus, to the advocacy from the Property Council and the support from National Australia Bank and the Clean Energy Finance Corporation."
"Eureka-Real Assets is proud to provide national leadership in the funding of projects that will impact the efficiencies of existing buildings and would like to see up to $100 million of projects funded in South Australia," said Bob.