NAB announces first commercial ‘green finance’ investment

According to the major bank, the initiative supports investment for:

• The purchase of existing commercial buildings with a current National Australian Built Environment Rating System (NABERS) Energy rating of at least 5.5 stars.
• Development of new commercial buildings, which have achieved a Green Star design review rating, and are on track to receive a Green Star rating of 5 or above.
• Retrofit projects for building performance upgrades that demonstrate at least a 30 per cent reduction in emissions intensity from their existing baseline rating and subject to a NABERS commitment agreement.

Salta has secured the loan for a commercial building and retail project called Industry Lanes in Richmond, Victoria. The mixed-use office building qualified for the loan due to its low emissions.

According to Cathryn Carver, NAB’s group executive for corporate and institutional banking, demand for energy-efficient commercial properties is on the rise.

“The technologies needed to enable decarbonisation (in the CRE sector) are available today. Australia’s commercial real estate market is primed and ready to transition,” said Carver.

“Industry Lanes is a prime example of how the property industry can make real progress with its decarbonisation strategies, and we look forward to our continued relationship to support Salta’s sustainability-led projects in the future.”

Continued investment in energy-efficient solutions is crucial in commercial property, as according to NAB they account for 25 per cent of overall electricity use and 10 per cent of total carbon emissions.

Meanwhile, an EY report referenced by the bank highlighted that Australia would be unable to reach net-zero targets without the real estate sector because the net-zero buildings of 2030 were being designed today and would be sold, leased, and occupied tomorrow.

Regulatory changes are reportedly changing the landscape of commercial green buildings. Standards for disclosure of sustainability and climate-related financial information would make climate, emissions, and sustainability a part of business strategy, key risks, and opportunities.

Making more commercial spaces green could also be a win for tenants, as EY also revealed that 92 per cent of corporate tenants were more likely to stay in a property if it had strong green credentials and would even be open to paying a green premium.

There are a variety of implementations that can help boost a building’s green standards. In regard to Industry Lanes, things like air-cooled heat pumps for heating, ventilation, and air conditioning; rainwater collection and storage; CO2 sensors for improved ventilation; and motion sensor controls for lighting public areas including amenities, lobbies, car parking; and for back-of-house areas, plant rooms, and stairwells are all helping make the space sustainable.

“Buildings are responsible for a quarter of Australia’s emissions, but they are also among the lowest-hanging fruit of emissions reduction. Our research finds tried-and-true technologies can do most of the heavy lifting of emissions reduction in buildings,” said EY.

With Industry Lanes now 98 per cent leased, the attraction to the green space is high. Salta’s ESG director Nikki Paton said: “We are pleased to have received this finance from NAB, and look forward to continuing to prioritise the development of ESG-focused buildings within our growing multi-sector pipeline.”

Related: Westpac the first supported by ‘landmark’ green energy program

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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