Insights

The NABERS scale is a rating from one to six that measures how environmentally sustainable commercial properties are in Australia.

NABERS stands for the National Australian Built Environment Rating System. The most environmentally sustainable buildings are rated six stars, while the buildings that are just making a start are rated one star.

Further, not only do buildings that rank higher on the NABERS scale have a reduced energy, waste and water impact, but they also very often have significantly reduced operating costs.

For commercial landlords or building owners, putting in the legwork to build to NABERS-friendly specifications and achieving a high rating can result in less overhead. For commercial tenants, choosing a building with a high NABERS rating can result in lower utility costs.
In fact, when an owner advertises a commercial space of more than 1000sqm in Australia, the NABERS rating has to be declared. What else should you know about the NABERS energy rating? Aegis Property Group has the details.

What is the NABERS Rating?

The NABERS rating is Australia’s sustainability ranking for commercial properties. It scores the environmental performance of offices, hotels, apartments, shopping centres and others on a one to six scale. The NABERS rating takes into account a building’s environmental performance, including energy use, water efficiency, waste production and the overall indoor environment.

As a benchmarking scale, the NABERS rating allows for owners and tenants to understand their building performance against other similar properties.

Accurately measuring the environmental performance of a building is growing in importance. Not only do businesses need to understand their environmental impacts, often for reporting and disclosure purposes, the efficient operation of a building can also reduce bottom-line costs.

Ratings systems, such as NABERS, encourage property owners to improve their building performance through market competition.

A robust and effective environmental reporting scheme is important for Australia’s commitment to achieve net zero carbon emissions by 2050. According to the World Green Building Council, buildings are responsible for about 40 per cent of the world’s global carbon emissions. Within this, commercial buildings generate about 25 per cent of Australia’s energy demand and 10 per cent of emissions. Decarbonising operations in buildings, and in their construction, will therefore have a significant impact on our overall carbon footprint.

There is a strong push to improve environmental performance in existing buildings and new construction. In addition to the NABERS rating, there is also the Green Building Council of Australia and the Better Buildings Partnership, all working together to improve sustainability.

Why Undertake a NABERS Assessment?

A NABERS assessment is important for property owners and tenants as it provides a baseline of the building's energy, water and waste consumption, providing oversight over its environmental impact. Sustainability assessments are commonplace, with 78 per cent of office space rated before 2020.

The independent measurement and monitoring scheme allows for confidence in sustainability reporting. This can be critical for ASX-listed companies and other major organisations that disclose to regulatory authorities or the market, amid rising scrutiny over “greenwashing” claims.

When building owners are aware of their environmental impact, they can take steps to improve it and make the building more efficient through energy efficiency, water conservation and waste reduction.

While it is not mandatory to undertake a NABERS assessment for Australian buildings, it is best practice to conduct independent, robust audits like NABERS or Green Star, in order to demonstrate responsible ownership of the commercial real estate.

A high NABERS rating can attract high-quality tenants who value sustainability, and those who are seeking the lower operating costs that can come from energy efficiency and low water use. The Australian Government stipulates that any leases or subleases for government offices totalling more than 2000 sqm must meet a NABERS standard of at least 4.5.

For property owners who want to drill down to their specific impact on energy, water and the indoor environment, there are also specific ratings categories for those.  NABERS Water ratings assess the whole building’s water use, including the base building and any tenancies.

How Are NABERS Ratings Are Calculated?

NABERS ratings are calculated using inputs from the base building, such as central heating and cooling, lifts and lobby lighting, water consumption, and energy. Depending on the building category, NABERS assessors may also look at the energy consumption of tenants working within the building, or the energy efficiency overall. The rating is valid for a maximum of 12 months after the end of the rating period.

Building owners or operators can estimate their NABERS rating. In fact, after entering into a commitment agreement for NABERS Energy, proponents must develop an energy estimate. This estimate - which must include all external supplied energy and its use, local weather data, building form, orientation and structures, occupancy, light and equipment - is later reviewed by a NABERS independent design reviewer. This process occurs prior to a construction certificate being issued. This accredited assessor will review the assumptions, documents and models and confirm or modify the estimate.

While energy is a popular assessment, measuring the carbon emissions, there is growing recognition of the importance of water and waste within an overall sustainability framework.

The NABERS assessment is recognised as a robust and credible national system of sustainability certification. Given its strong reputation in the market, NABERS has extended to the United Kingdom and New Zealand.

How Do You Improve A NABERS Rating?

Once the NABERS rating is known, this sets the foundation for a sustainability plan for improvement. NABERS suggests a suite of actions to improve environmental and cost efficiency, and create a sustainability strategy across the organisation.

This includes asking the NABERS assessor within the independent design review for specific short-term and long-term areas for improvement, then updating corporate policies, procedures and KPIs for energy performance or including sustainability requirements in procurement specifications.

For how to improve a NABERS rating, owners can measure and monitor their outputs, then choose where to optimise. This could be through installing energy efficient lighting or heating, or reducing use when not required.

Looking for a sustainable building?

Learn more about NABERS and commercial property with Aegis Property Group. The inner-Brisbane leasing experts have a range of green buildings available for leasing for your office requirements. Find out more with Aegis Property Group.