Our industry is engaged in an important dialogue to improve the efficiency and resilience of real assets through transparency and industry collaboration. This guest article contributes to that conversation and does not necessarily reflect GRESB’s views or position, nor does it represent an endorsement. The GRESB Insights blog is designed to share diverse industry perspectives and foster informed discussion on key topics for real assets investments.
As NABERS UK Energy for Offices ratings continue to gain traction amongst investors, building owners, and occupiers, we spoke with licensed NABERS UK assessor Owen Porter about his experience of the rating scheme and how it can incentivize improvement.
What is NABERS UK, and how do the ratings work?
The NABERS UK scheme is a performance-based rating system for commercial buildings. It was launched in November 2020 and is based upon the Australian NABERS scheme, which is widely recognized as the most robust of its kind. The scheme is currently focused on offices.
NABERS ratings are based on actual (not modeled) performance. The ratings are verified by measuring energy use over a period of 12 months. The result is a 1-to-6 star rating that reflects how efficiently a building operates, with consideration for variables like occupancy, hours of operation, and climate.
How does this apply to office buildings with multiple tenants?
For buildings managed by one landlord but rented by multiple tenants, there is the option to delineate the whole building’s energy use between the landlord and each tenant, offering ratings to every party with responsibilities for energy performance within the building. In this case, the landlord is rated on the base building performance, as this is what they have the agency to control and improve. Each tenant can then be separately rated for their use of light and power in their demise.
A whole building rating is also available, assessing the building’s overall performance. This is more appropriate for buildings with a single occupier but can be useful to show the aggregated performance of a whole multi-let building.
How do the ratings benefit landlords and tenants?
Landlords who are able to demonstrate a good base building rating can offer tenants proof that their building is well-managed and controlled, with reduced operating costs. In Australia, better NABERS ratings have been shown to lead to higher rents and lower void periods.
Tenants can assure their staff that they are being provided with a good working environment as a result of good base building management and control, such as avoiding simultaneous heating and cooling. This promises comfort and well-being benefits and the likelihood of enhanced productivity, not to mention supporting corporate ESG and net-zero goals.
What opportunities do NABERS ratings offer that incentivize continuous improvement?
Chance to improve ratings each year
Because NABERS UK ratings are repeated each year, the ongoing process is causing site teams to think seriously about improving their performance to increase their ratings year-on-year. In Australia, we can see how this has improved energy efficiency in buildings over time, and we are starting to see UK office buildings that have committed to the NABERS UK journey following the same path of improvement.
Many buildings are significantly improving their performance by optimizing their existing HVAC systems through the fine-tuning of controls, closer management, and fast reactions to faults. Combining NABERS UK with building optimization programs is proving to be a cost-effective route to higher ratings, offering clear direction to site teams and ensuring savings made do not go backwards.
The need for accurate documentation
For a seamless NABERS UK assessment process, a business must provide up-to-date, reliable information on energy use, building services, metering schematics, floor plans, and meter commissioning and validation certificates. This type of information is essential to have to comply with the NABERS UK rules. Many businesses are seeking out a rateability survey before formal certification to make sure all required documentation is in place. A rateability survey helps to identify gaps in the metering strategy, whilst also highlighting any missing or incomplete documentation, such as system schematics and maintenance records, which are essential for a successful assessment.
Improved structure and clarity for metering and control strategies
Many existing UK offices suffer from poorly defined metering and control strategies and unclear operational responsibilities. This can result in inconsistent performance and blurred accountability. NABERS UK can help in these areas by encouraging early transformation measures such as establishing simple agreements to prevent conflict over plant operation, improving submetering to gain more detailed insights into energy end use, and clearly defining roles and responsibilities. These early measures help build stability and confidence, paving the way for more significant changes to leases, controls, and operational and management practices.
However, it is important to note that these actions are part of a broader transformation, not the end point of the process. For older buildings, achieving this transformation will be a gradual process rather than an immediate solution.
There is a clear difference between what is needed for new developments and what is needed for existing buildings. Design for Performance (DfP) seeks to embed the right approach from day one in new developments, providing exemplars that demonstrate how aligning roles, responsibilities, and technical systems from the outset can help deliver high-performing buildings. For existing buildings, the challenge is to follow that lead by moving towards the clarity and accountability needed to drive lasting improvements in energy performance.
What does the future look like for NABERS ratings?
Ambitious NABERS UK ratings are currently being considered as a recognized route to meeting the operational energy limits for offices under the UK Net Zero Carbon Buildings Standard (UKNZCBS).
In March 2021, the UK government consulted on a performance-based policy framework for large commercial and industrial buildings. The preference was to mandate disclosure of operational energy performance in offices via the NABERS UK scheme. The consultation received broad support from all key stakeholders, and the industry continues to advocate for its adoption, recognizing its proven success in the Australian commercial buildings market.
Clearly, this is a rating worth considering, with an impactful future in the real estate sector.
How can I learn more about this topic?
In Verco’s upcoming webinar, The case for building optimization: Act now to reduce costs and deliver value, real estate experts will demonstrate how a well-executed optimization strategy can unlock cost-effective improvements, with returns achievable within a single service charge cycle. Tune in on Tuesday, November 4, at 14:00 BST for specialist advice and to ask questions directly to the Verco team.
This article was written by Bethan Phillips, Associate Director and Owen Porter, Senior Consultant at Verco. Learn more about Verco here.