In this age of more subdued consumer spending, rising operating costs, high debt, and “green thinking,” there is growing demand for transparency around business energy use – both in terms of operational costs and alignment with corporate sustainability goals and ESG mandates.

Tiana Warren, head of corporate and occupier services for Bayleys Property Services (BPS), says while considerable improvement has been made to the energy efficiency of commercial assets – particularly new developments – increasing energy costs remain a concern, with low hydro lake storage levels and declining gas reserves creating supply tensions.

“We’re seeing more landlords and occupiers working collaboratively to procure better energy pricing and foster comprehensive energy saving measures, rather than tenants managing their energy consumption independently,” she says.

“Energy is the third largest operating cost for commercial assets, but besides cost savings, energy efficient buildings are also important for employee wellbeing, compliance, ESG goals, and sustainability.

“Landlords and tenants share the responsibility to reduce energy consumption and carbon emissions. Many occupiers have set net zero or carbon neutral targets, relying on landlords to demonstrate good environmental performance through ratings like NABERSNZ or Green Star in their buildings.”

These industry certifications are essential for evaluating and rating building performance at both the building and tenancy levels, says Warren.

“More occupiers are undertaking NABERSNZ tenancy ratings to identify a base energy and carbon emission position, to then employ reduction targets across the business.

“Key steps include understanding the building’s design, build, plant and equipment credentials – right through to energy sources, building management systems and other integrated smart technologies.

“Occupiers should seek information from their property or facilities’ manager about energy consumption trends within the building, to promote transparency and shared responsibility to conserve energy and explore efficiencies.”

The BPS team can help facilitate energy audits to identify inefficiencies and cost savings opportunities for its landlord and occupier clients. Recurring collection and analysis of energy data, as well as other utilities such as water and waste, can uncover trends in consumption that can be rectified to mitigate overconsumption or inefficient building operations.

“During annual CAPEX and OPEX budgeting with our clients, we are able to advise on, and make provisions for, energy costs. We can also assist with electricity tenders to ensure they are getting the most competitive market prices for their portfolio and explore renewable energy options for clients.

“Building ESG awareness among landlords and occupiers promotes shared responsibility for reducing carbon emissions. Lease terms that reflect these shared ‘green’ commitments and responsibilities can be established, such as agreements for both parties to share energy data to support whole-building NABERSNZ ratings.”

Matt Lamb, Bayleys national director office leasing, says the overarching trend among office tenants, particularly large corporates, is for more sustainable and efficient buildings – with stakeholders demanding transparency around energy costs and outputs.

“Anything new has been built to the highest green standards, and NABERSNZ is a very powerful tool in this regard,” he says.

“For existing, older buildings, Bayleys facilities’ management arm can work with landlord and occupier clients to start collating, measuring and monitoring outputs to give a baseline to work from.”

Lamb stresses that offshore-headquartered businesses tend to have strict energy efficiency policies, so a building’s performance credentials are an important part of the decision-making matrix.

“When large corporate occupiers sign on for long-term leases, they expect a building’s energy performance and rating to be future proofed for the duration of the lease.

“Publicly signalling the energy efficiency of a building and commitment to sustainability is also gaining momentum, with lobby directory boards showing performance dashboards across a number of metrics.”

In the retail sector, Chris Beasleigh, Bayleys national director, says occupier businesses tend to have their own energy efficiency stance. Their specifications for new builds or their fit-out design if retrofitting existing sites often include preferences for LED lighting and cost-effective, efficient heating and cooling.

"Big players are leading the way, with companies like Westfield's New Zealand retail sites fully supported by renewable energy sources in their quest to achieve net zero by 2030.

“Meanwhile the new Ikea Auckland store will have a 5-star Green Star rating with LED lighting to cut energy use, solar panels to produce all its electricity needs, electric charging stations in the car parking areas and rainwater recycling systems.”

Scott Campbell, Bayleys national director industrial, says solar energy use is evolving in the industrial sector, with developers incorporating sophisticated systems into new builds.

“Argosy’s largest industrial build to-date in Neilson Street, Onehunga, will have one of the country’s biggest rooftop photovoltaic installations, and feature smart lighting and air conditioning solutions among other green initiatives.”

The landlord owns the solar infrastructure but can pass on the benefits to occupiers, says Campbell.

“Due to the cost of battery storage, excess solar power tends to go back to the network, although Tesla stores energy via its high-tech’ storage system at its new-build Māngere site.”

Prudent practices around energy use are now standard among industrial occupiers with zone and activity-triggered lighting, and thermal break glazing to reduce energy loss and avoid costly HVAC systems.