Productivity, Wellbeing and Amenity Market Considerations
Australia does not have an officially recognised method for measuring and monitoring Indoor Environment Quality (IEQ) in buildings, there are no mandated disclosure requirements and the link between IEQ and office worker productivity and wellbeing in Australia has not been proven. While this is the case now, we believe that in the future IEQ will receive greater focus from office tenants and home purchasers mindful of the amount of time they spend indoors and the influence of indoor environments on their comfort and productivity.
We have noted that an 'indoor air' working committee has been established by Standards Australia and that the NSW Government will shortly launch the next component of the NABERS suite of office ratings (called NABERS Office Indoor Environment Quality).
Market Considerations — Investment & Asset Management
Colliers International, in its 2006 survey of key decision makers for tenants occupying ≥500m2 in Sydney, Melbourne and Brisbane, found that the health and wellbeing of staff was likely to be the second highest influence on premises selection for major tenants in the future (after information and communications technology (ICT) systems reliability and security). The European Union has recently identified definitive relationships between various contributors to IEQ and worker wellbeing and productivity using data drawn from the EU, USA and the WHO.
While we believe it is very important we retain our focus on the resources used to operate our buildings, normally energy, water and waste management together represent less than $20/m2/year in base building outgoings ($40/m2 if tenant direct costs are included). A typical office tenant's wages bill, by comparison, is generally around $4,000/m2/year. This means even a very small improvement (or decline) in productivity, wellbeing or absenteeism will potentially have dramatic consequences for the fortunes of tenant organisations.
Market Considerations — Development
If IEQ emerges as an issue for tenants in existing buildings, it will definitely become a major factor in the design and development of new commercial office buildings. Already Green Star Office Design ratings are almost obligatory in many markets, with IEQ being a prominent component of an official rating. We anticipate that tenants will soon begin scrutinising the various components that make up a building's overall environmental rating and start paying particular attention to IEQ performance.
Currently there is a relatively low level of understanding among home buyers about volatile organic compounds (VOCs) and other opportunities to enhance the indoor environmental quality of new homes. Educating the market is therefore crucial and we are confident we can begin to do this within the context of growing public environmental awareness.
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