Building Upgrade Finance

Providing finance for non-residential building upgrades.

Building Upgrade Finance is a unique finance product that is available in the City of Adelaide to fund environmental and heritage upgrades to existing non-residential buildings. It is provided by private sector finance providers and enabled by the Council.

“It’s (Building Upgrade Finance) opened my eyes to a whole new world on how to design, how to manage and how to continually upgrade significant assets at a top standard. And it’s all paid for by energy savings. You’re getting it for free.”

John Culshaw | Building Owner and Chairman - Culshaw Group

An overview

Building Upgrade Finance:

  • is long-term, fixed interest finance for environmental and heritage upgrade works to non-residential buildings
  • is registered against the land and is transferable between property owners on the sale of the property (if agreed to by all parties)
  • enables landlords to secure financial contributions from tenants for upgrade works (where tenants realise utility bill cost savings or consent to contribute), through outgoings provisions in existing or new leases

Building Upgrade Finance is available for a wide range of environmental upgrades including solar photovoltaic (PV) panels, water and energy efficiency fittings, wastewater reuse systems, waste management systems and much more.

Owners of non-residential State and local heritage listed buildings can also access finance for conservation works, access or building compliance improvements and works to allow ongoing use of the building.

The loan structure involves three parties entering into a Building Upgrade Agreement:

  • the building owner seeks finance for a building upgrade
  • the finance provider lends finance for a building upgrade
  • the Council collects repayments from the building owner and transfers them to the finance provider

This structure provides the security for the loan and enables unique benefits that differ from other finance solutions.

Building upgrade finance illustration

The key to Building Upgrade Finance lies within the Building Upgrade Charge that is levied on the building owner quarterly by council. This recovers principle and interest payments for the financier.

The Building Upgrade Charge effectively secures the loan as a payment due to a council. This provides heightened security to the financier, allowing them to offer attractive loan terms to the building owner.

  • No additional security required.
  • Long term finance is available (e.g. 10 - 20 years) providing potential for neutral/positive cashflows. The operating savings from upgrades can help to repay the finance, further improving cashflows.
  • Competitive interest rates can be fixed for the full term of finance.
  • No deposit is required. 100% project finance is available including soft costs with no impact on capital budgets.
  • Potential to share costs and benefits with tenants. Tenants can also request upgrades, contributing to the repayments.
  • Option to transfer on sale because finance is attached to the land. If the land is sold, the remaining finance may be transferred to the new owners or discharged on settlement.

To qualify for Building Upgrade Finance both the building, and proposed upgrade work must meet certain criteria.

The building

To qualify for Building Upgrade Finance, a building must be:

  • primarily for commercial, industrial or other non-residential purposes (residential properties are not eligible); and
  • at least two years’ post-construction.

In addition, upgrade works must meet the definitions described below.

Environmental upgrades

Environmental upgrades relate to works that improve the energy, water or environmental efficiency or sustainability of a building. Examples include:

  • Generation of renewable energy and emissions reduction (eg: solar PV, end of trip facilities etc.)
  • Improvement of energy and / or water efficiency (eg: efficient plant and equipment – lighting, air conditioning, boilers and lifts; rainwater tanks, water efficient fixtures and fittings etc.)
  • Minimisation of waste or works that enable the recovery or recycling of materials (eg: waste infrastructure systems)

Heritage buildings

A heritage building is one that has State or local heritage listing. Eligible works in relation to a heritage building include:

  • works for the purposes of maintaining, repairing, upgrading or reinstating the heritage significance of the building
  • works associated with compliance with requirements under the Building Rules (within the meaning of the Development Act 1993) or the Disability Discrimination Act 1992(Cth)
  • works for the purposes of facilitating the ongoing occupation of the building.
  1. Identify building upgrade opportunities for your building.
  2. Discuss Building Upgrade Finance eligibility with your finance provider or the Council, and seek a finance quote (contact details can be found at the end of this page).
  3. Confirm finance and council approval. Please use the Building Upgrade Agreement Form. The Building Upgrade Finance Central Facilitator can assist with the process.
  4. Sign the contact (Building Upgrade Agreement).
  5. Post-Contract: Funds released, upgrade works undertaken, finance repaid and reporting requirements met.

The City of Adelaide charges administration fees on a cost recovery basis to manage collection and transfer of repayments under a Building Upgrade Agreement. Indicative fees are provided here.

The Building Upgrade Finance website provides further information including product features, tenant contribution pathways and possible finance providers.

For further information about Building Upgrade Finance legislation, the agreement template and the ‘no worse off’ methodology for estimating tenant cost savings, please visit the Department for Environment and Water website.

Building Upgrade Finance – a success story

In 2018, building owner, John Culshaw, shared his experience in utilising Building Upgrade Finance to make energy-saving improvements to 26 Flinders Street, Adelaide.

Watch John's video to hear more about the benefits of Building Upgrade Finance.

Need more information?

The Building Upgrade Finance Central Facilitator is funded by the State Government and hosted by the City of Adelaide to assist with the implementation of Building Upgrade Finance across South Australia.

The dedicated Central Facilitator can be contacted at:

8203 7884