The biggest loser when it comes to poor landlord-tenant relationships is the environment, says Umow Lai’s ROGER KLUSKE. He notes that this often results in a building’s real performance falling short of what was promised.
The relationship between tenants and landlords has always been strained. It seems as if the property industry has an ingrained ‘win or lose’ mentality, where we sometimes pride ourselves on our ability to ‘bash up’ our opponents. But, times are changing.
Guaranteed environmental performance – in the form of mandatory building disclosure, and Green Star and NABERS ratings – is now required for most new and many existing buildings. This is going to force a paradigm shift in how landlords and tenants interact.
Here’s why: building a new building or refurbishing an existing building to current performance levels is expensive. Designers take a building design off transparent paper and out of energy modelling programs to a point where it ‘ticks all the boxes’. This is satisfying and gets many of us out of bed each morning. Then, constructors build the base building. So far, so good.
But, then, the tenant fits out the building with two or three levels of high-density call centres and a 250-square metre data centre. They want to operate the building continuously, the lighting system needs to be changed, everyone has an enclosed office, they all drive to work and an internal stair is cut into the building to link the floors.
The base building’s team is in despair because they will never achieve the desired Green Star or NABERS rating now. Landlord – zero.
From the tenant’s perspective, when it searched for a building, a critical criterion was a high-performing NABERS or Green Star rating. It saw this as a once-in-10-year chance to gain an advantage over its competitors. It could amalgamate call centres, improve elements such as cyclists’ facilities and provide high-tech audiovisual systems. In some ways, it’s a fresh start for the organisation. It will have a new building and can place new emphasis on staff and performance, with the added benefit of displaying that the organisation is a good corporate citizen.
For the tenant, the first warning sign of trouble on the horizon arrives along with the tenant design guide that dictates limits on population density and hours of operation. It comes to the tenant’s attention that the low greenhouse gas emission electricity from the cogeneration system is not available now (what does the fine print say?) and that the extensive photovoltaic system on the north façade has disappeared through a ‘value management’ process. The final straw is when the building’s facility manager advises the tenant that the building has missed the promised NABERS rating by one-and-a-half stars. Tenant – zero.
The end result is worse than a zero sum game, because the landlord’s zero added to the tenant’s zero actually results in the environment ending up with minus two.
REACHING GREEN GOALS THROUGH COOPERATION
Is there a solution to this problem? I believe that all participants would agree that the adversarial system has problems and that this is where the paradigm shift is required. What if the process looked like the following instead?
The tenant assesses their existing and future needs, develops a matrix and benchmark document that sets out all of its accommodation requirements, including Green Star and/or NABERS ratings and the Property Council of Australia’s benchmarks. It nominates how it intends to use the building in as much detail as possible.
The base building team then provides a design that reflects the tenant’s desires and answers questions such as:
- Does the tenant have access to the power generated through the cogeneration systems?
- Can the tenant put an exhaust system into the ceiling for a staff kitchen or for additional supply air for additional air-conditioning for perimeter meeting rooms?
- Can the tenant expand the electrical system in the future?
Now there is common ground and both sides have information to share. Perhaps collegiate working groups will allow all interested parties to learn, share and improve. After all, wouldn’t we all rather spend our time helping to achieve a building that operates at its very best, rather than ‘slog it out’ over legal agreements? If we adopt a spirit of cooperation, we can all be winners, including the environment.
Roger Kluske is an associate of Umow Lai and the company’s director of sustainable environment. He will be speaking at the Air-Conditioning, Refrigeration and Building Services (ARBS) Exhibition, which will be held in Melbourne from 7 to 9 May 2012, on the promise of energy performance versus actual delivery in today’s green buildings.