Existing buildings have an essential role to play in our broader pursuit of net zero carbon given that when the deadline ticks over in 2050, at least 70% of the buildings that will be standing, exist today, and 50% of those were constructed prior to 1970. This being said, as Property and Asset Managers, we must adapt our approach and develop effective ways to assess the following:

1)     How these buildings have been designed;

2)     How they are performing in operation;

3)     How they can be optimised to ensure that they are meeting the design intent; and,

4)     How they can be improved to maximise efficiency.

NABERS Energy measures the efficiency of an office building and rates its performance. The energy rating is calculated by comparing the energy consumption of a building against a set of benchmarks that have been developed using actual data. The rating applies to the base building performance, which includes central services that are under the control of the Property Manager. These consist of essentials like heating and cooling systems, as well as lifts and lobby lighting, allowing office buildings to be compared based on how the central services are being run to provide a comfortable working environment for users.

For Property Managers this approach is a welcome development as existing benchmarks tend to assess performance of the whole building, a proportion of which includes unregulated energy, that can account for up to 50% of the total energy, largely consumed within occupier demises. Isolating the base building enables Property Managers to report on the success of efficiency projects undertaken on central plant or in common areas, but more importantly than that, it enables an assessment of the operational performance against the design intent of the property. Supplementally to this, direct monitoring and recharging for occupier demises also allow for accurate costs of usage that are able to be attributed to the occupiers, uncommon in the UAE market.

Existing buildings must have appropriate plans in place to make a significant contribution to the required reduction pathways. It makes sense that certain principles should be made applicable to existing buildings as a means of ensuring that an assessment of the design specification of any building could be made and compared to its operational performance. Should there be a performance gap between the two, the Property Manager can look to assess how the gap might be closed, ideally through adjustments to management practice on site.

This then provides a starting point from which to assess how performance can be improved further, more importantly it enables Property Managers to report on the management of an assessment relative to its potential, if a building is designed to consume 300kWh/m2 and reports a similar figure for operational intensity while we might agree the performance is terrible, it may simply be limited by its specification.

This then opens the door for a full review of that specification and the identification of interventions that might be made to improve performance through management practice, plant replacement, reviews of building fabric and so on. Taking this approach enables plans to be produced for discussion with the property owners leading to the development of an implementation plan, or a view to be taken on the risk posed by the property in line with the net zero carbon strategy.

“Managing for Performance” could not only be used by property owners or managers to assess real estate holdings but might also be used when considering which assets to purchase. Its inclusion in the due diligence process would enable fully informed decisions to be made around the stranding risk that might exist, or the value of the investment required to bring the asset up to standard. 

The ability to assess existing buildings has since been brought into sharper focus with COP26 currently in progress, Managing for Performance could contribute to the development of such a standard, and enable such renovations to be identified and completed in line with the proposed timescale.

The question still outstanding is, will the UAE take the opportunity to engage with these initiatives to reduce the use of energy in our residential and commercial real estate, being so reliant on air-conditioning?

(For more information on and aspect of sustainability in the management of real estate assets or across portfolios please contact Carl Brooks on carl.brooks@cbre.com or Alex Barzycki for an introduction to the ESG team.)

About the author: 

Lindsay McQuillan,Director, Head of Property and Asset Management

Lindsay has acted for a diverse range of corporate clients including specialist REITs, Investment Funds and Privately-Owned Property Companies, advising her clients in all aspects of commercial property. She has specialist experience in; shopping centre acquisition, asset management and value add strategy, setting and reviewing business plans as well as ongoing property management and service charge analysis.