09 Aug, 2017

City of Adelaide First to Offer Building Upgrade Finance Agreements

The City of Adelaide last night agreed to participate in the Building Upgrade Finance mechanism by offering to enter into Building Upgrade Agreements to commercial property owners.

Building Upgrade Finance (BUF) is a commercial loan mechanism which assists building owners to access long-term finance at competitive fixed interest rates to improve energy, water and waste efficiency of existing commercial buildings and undertake upgrades to heritage buildings.

Improving the environmental performance of commercial buildings leads to financial savings for building owners and tenants through reduced utility bills. Environmental and heritage upgrades will also create economic opportunities in the city through revitalisation of ageing and underutilised buildings.

City of Adelaide Lord Mayor Martin Haese said that it will allow commercial building owners to undertake energy efficiency upgrades that could be cash-flow positive from day one, and make their buildings more appealing and comfortable to tenants.

“Building owners can benefit from 100 per cent project finance, removing the need for upfront capital, and stimulating more investment in city buildings.

“And in an Australian first, it will also support building owners to undertake restoration and upgrades of heritage buildings, including modifications to meet building rules and disability code compliance.”

The Minister for Climate Change, Hon Ian Hunter MLC, said, “This is a great opportunity for commercial property owners to be one of the first to trial an innovative way of financing environmental upgrades.

“Landlords know that greening their buildings is no longer optional if they want to remain competitive and this financing will help them remain at the forefront of a worldwide shift towards green buildings. “The new financing scheme is a win for a property owners, tenants, a win for the economy and a win for the environment through reduction of greenhouse gas emissions. The savings that these upgrades can deliver mean that the upgrades can pay for themselves.”

South Australian Executive Director of the Property Council of Australia, Danial Gannon, welcomed the City of Adelaide’s leadership in supporting this innovative scheme.

“Building Upgrade Finance is good for owners, good for tenants, and good for the environment, and the Lord Mayor has been an important ambassador for this initiative,” he said.

“As a scheme, it will reduce operating costs, increase yields, help attract and retain tenants, and increase asset values. In simple terms, it’s a policy no-brainer at a time when vacancy rates are high and tenant demand is soft.”

Managing Director of Eureka Real Assets Bob Kelly, applauded the City of Adelaide for being the first Council in the State to offer building upgrade agreements and confirmed Eureka’s commitment to provide up to $100 million for building upgrades in South Australia.

Building owners should speak to their financier to start discussions about using Building Upgrade Finance (BUF) for proposed upgrades. City of Adelaide property owners interested in BUF should call 8203 7203 or click here for more information.

Paula Stevens