Time to end the nonsense with BUF delays

Time to end the nonsense with BUF delaysIt’s time to put a stop to the nonsense with the prolonged debate around building upgrade finance. This sort of delay is damaging confidence and our ability to drive down Adelaide’s office vacancy rates. In February 2015 the Local Government (Building Upgrade Agreements) Amendments Bill was introduced into State Parliament. Currently in the Legislative Council, the bill is designed to overcome barriers to environmental upgrades of existing commercial buildings – upgrades that can improve the carbon footprint and environmental performance of existing building stock. As we all know, building upgrades can reduce operating costs, increase yields, help attract and retain tenants and improve asset values. It’s a no-brainer for commercial property owners, but also for tenants. And when we talk about tenant benefits, we’re talking improved indoor amenity, staff productivity, contributions towards corporate social responsibility goals, and in many cases a net reduction in operating costs. In fact, there’s a plethora of case studies supporting this argument. So, what can be upgraded? Anything that improves energy, water or waste efficiency is in scope. This includes solar panels, double glazing, LED lighting, motion sensors for lighting, weather proofing (fixing of cracks/gaps around windows and doors that have heating/cooling impacts), chiller and ventilation upgrades. The Building Upgrade Finance mechanism makes sense on an economic front, not only for building owners and occupiers as a means of managing their utility costs, but for the businesses that can provide the clean technologies and solutions that lift building performance. Financing such upgrades may offer a number of benefits compared to traditional forms of finance. Think big. It could be applied to offices, shopping centres, hotels, healthcare facilities, university buildings, factories, and warehouses. And what makes things really confusing is that similar legislation has been tried and tested in the eastern states. Parliamentarians currently not supportive of this financing should be comforted by this thought. There’s absolutely no reason to delay the passage of this Bill, particularly when we look at what’s happening in our city’s office market. The takeout message from recent data is around adaptive reuse and removing barriers to reusing ageing commercial building stock. We’ve seen an increase in vacancy rates across lower grade building stock, with C Grade at more than 17% and D Grade at almost 20%. With a lot more space due to come online in the second half of 2015, and plenty more in the pipeline for 2016, we need to solve our adaptive reuse predicament. That means we need to start bulldozing development and building code barriers preventing the transition from ageing commercial buildings to prime multi-residential stock. And it also means telling our Parliamentarians to put a stop to the nonsense and get on with passing this important legislation – legislation that will help create jobs in an industry that accounts for 168,000 jobs in South Australia.