An innovative business model that provides commercial tenants with on-going support to reduce their carbon emissions could redefine landlord-tenant relationships in the UK, according to independent analyst firm Verdantix.
Verdantix - in its March 2011 report “Low Carbon Real Estate Fund Launched in the UK”, - describes the unique approach to landlord and tenant engagement taken by the Low Carbon Workplace Partnership as “key to value add” for ‘green’ real estate funds. The initiative could pave the way to long term carbon efficiencies from existing building stock, it says.
The Low Carbon Workplace Partnership, set up in 2010 between the Carbon Trust, developer Stanhope and fund manager Threadneedle, invests in tired commercial office buildings and repositions them through extensive green refurbishments.
Low Carbon Workplace Ltd, a Carbon Trust subsidiary and exclusive Carbon Advisor to the Fund, partners with tenants through a pioneering agreement, the Low Carbon Workplace Charter, that stipulates the measures needed to manage their carbon footprint in an individual building on an ongoing basis. Achieving low carbon targets makes the tenant eligible for certification to the Low Carbon Workplace Standard, a new environmental benchmark for buildings.
Tenants now consider environmental efficiency to be a proxy for quality in the leasing market. This is the first example of a landlord and tenant proactively engaging on building carbon efficiency performance and it’s an approach that adds value for both parties” said Ray Crowley Verdantix analyst and author of the report.
Katharine Deas, Managing Director of Low Carbon Workplace Ltd, said:
“Even in the most carbon efficient buildings occupiers play the crucial part in minimising emissions. Yet many occupiers lack the specialist resources required to keep their carbon footprints down.
“Low Carbon Workplace is the first property initiative to identify and address this barrier by providing support on a long term basis. We believe it is an attractive proposition for any organisation looking to reduce its carbon emissions.”
Low Carbon Workplace recently announced the acquisition of its first four properties and has pre-let its first property – Premier House in Twickenham, Surrey – to the Thames Valley Housing Association.
The roles of the partners:
The Carbon Trust:
The Carbon Trust is a not-for-profit company with the mission to accelerate the move to a low carbon economy, providing specialist support to business and the public sector to help cut carbon emissions, save energy and commercialise low carbon technologies.
Low Carbon Workplace Limited:
Low Carbon Workplace Limited is a wholly-owned subsidiary of Carbon Trust Enterprises Limited, the commercial arm of the Carbon Trust, and will contribute low carbon design advice for refurbishments, coordinate the Low Carbon Workplace Standard and provide ongoing low-carbon assistance to occupiers under the Low Carbon Workplace Charter.
Threadneedle is the fund manager for the Threadneedle LCW Trust. Threadneedle has one of the largest and most experienced property teams operating in the UK today with 26 investment professionals.
Threadneedle has been investing in commercial property since 1994 and currently manage more than £5.6 billion in property assets (as at 31.12.2010). Our property team have an average of 17 years’ market experience and have been with Threadneedle for more than nine years on average. This stability has been a key factor in the team’s success.
Indeed the team was awarded the Fund Manager of the Year at the 2009 Property Week Awards – the fourth time they have won this high profile award, and were also awarded Europroperty’s Fund Manager of the Year 2009.
Stanhope Plc is a specialist UK real estate developer of major commercial and mixed-use projects. With 25 years experience, and more than £10 billion of completed projects behind it, Stanhope has built an unrivalled specialist in-house team which has earned a reputation for quality and integrity that is second to none.
Stanhope will devise and deliver all the refurbishment work for LCW. With a strong focus on research and innovation, Stanhope has been at the forefront of sustainable innovation in the built environment for over a decade. Stanhope’s experience in the field and established supply chain, along with a commitment to working with the occupier throughout the design process, will reduce both financial and material waste.
Stanhope’s completed projects include Broadgate, the Royal Opera House, Tate Modern, HM Treasury and Paternoster Square and totals more than 30 office buildings delivered for owner occupiers or pre-lets. The team is currently working on a pipeline of 10million sq ft across 17 projects with partners including the Crown Estate, Legal & General, BSkyB and Schroders.
Verdantix is an independent analyst firm focused on sustainable business. Verdantix sustainable real estate research covers investment, development and occupational strategies, services, technologies, financing and regulation affecting real estate actors. The research bridges the individual asset level, portfolio level and larger scale of sustainable urban developments.