CBD UPDATE November 2010


There have been changes made to the Building Energy Efficiency Disclosure (Disclosure Affected Buildings) Determination concerning mixed use buildings and buildings which have undergone major refurbishments. These changes came into effect on 29 November 2010.

Mixed Use Buildings

The Government has decided as ‘an interim approach’ buildings with less than 75% office space (of the net lettable area), will not be required to disclose a NABERS Energy rating.

Mixed use is defined as buildings which combine office space with other functions such as warehouses, medical centres, hotels or retail outlets. These buildings often share energy metering and as a result, it can be difficult to provide an accurate energy rating for the separate spaces.

Typical Example:

For some buildings, such as mixed office/warehouses, gross lettable area may be the industry standard. Where this is the case, and net lettable area is not available for this calculation, gross lettable area may be used.

 A 100,000m2 building with office space of 90,000m2 and retail space of 10,000 m2 would need to disclose an energy efficiency rating.

 A 100,000m2 building with office space of 60,000m2 and warehouse space of 40,000 m2 would not need to disclose an energy efficiency rating.

This approach to mixed use buildings is an interim measure only during the transition year of the program and will be subject to review by a panel of industry experts. This panel will report back to the Government before the end of July 2011 on their recommendations.

Industry will be given clear advice and an appropriate timeframe to adapt to any changes, recognising the possible need for metering changes and collection of 12 months data for a NABERS Energy rating.

What action do I need to take?

If your building has less than 75% office space, it is classed as an ‘exception’ to the CBD program and you do not need to take any action.

However, to determine if your building is within the 75% threshold, it must be determined in accordance with the Method of Measurement for Lettable Area’ published by the Property Council of Australia.

Owners of buildings that are below the 75% threshold but wish to voluntarily comply with the legislation may lodge their NABERS ratings on the Building Energy Efficiency Register.


Buildings which have had major refurbishments that will have a substantial effect on the energy performance of the base building will not be required to disclose a NABERS Energy rating for two years from when the certificate of occupancy is issued.

Major refurbishments are those that involve substantial changes being made to the fabric, plant or equipment in the building and require a certificate of occupancy issued under a law of a State or Territory, prior to the building being occupied or re-occupied.

If your building has undergone a major refurbishment it is classed as an ‘exception’ to the CBD program for two years after the issue of the certificate of occupancy, no action needs to be taken during this time. However, after two years of occupancy it is assumed that energy data can reasonably be assessed and from this point most building owners will need to comply with the legislation and disclose an energy efficiency rating.


important dates announced

Under the Building Energy Efficiency Disclosure Act 2010, there will be a transition period for the first twelve months of the Commercial Building Disclosure (CBD) program.

July 2010  

Disclosure Act commences – no disclosure obligation

01 November 2010

Implementation date – disclosure obligation commences for affected offices offered for sale, lease or sublease. Transition period begins – NABERS Energy ratings are to be disclosed


Building Energy Efficiency Certificate  can be obtained

31 October 2011

 Transition period ends

01 November 2011

Full BEECs are to be disclosed from this date onwards

The Act commences in July 2010, but the energy efficiency disclosure obligation does not commence until November 2010.

From 1 November 2010 to 31 October 2011, the energy efficiency rating required to be disclosed will be a National Australian Built Environment Rating System (NABERS) base or whole building rating.

In order to meet the Act requirements, the NABERS Energy rating must

  • be obtained either before or during the transition period
  • be a base building or whole building rating
  • be current (that is, the validity period stated on the NABERS Energy rating must not have expired) and
  • be publicly accessible on the CBD program website

From 1 November 2011, a full Building Energy Efficiency Certificate (BEEC) will need to be disclosed and must be publicly accessible on the Building Energy Efficiency Register.


Building Energy Efficiency Disclosure Update 01 July 2010

With the passing of the Building Energy Efficiency Disclosure Bill 2010, the disclosure requirements under the Commercial Building Disclosure scheme (CBD scheme) will commence around October 2010. The Government will make this date known and finalise the regulations of the scheme in the coming weeks.

The aim of the scheme is to ensure that credible and meaningful energy efficiency information is given to prospective purchasers and lessees of large commercial office space. The scheme requires owners and lessors of commercial office space with a net lettable area of 2,000 m² or more, to disclose the energy efficiency rating to prospective purchasers and tenants when the space is to be sold, leased or subleased.

Key changes to the legislation

The final legislation includes a number of key changes made in response to views expressed by stakeholders including:

 changes to the transitional provisions
 delaying the tenancy lighting assessment
 reducing the maximum penalties.

Transitional provisions

The legislation contains transitional provisions that will apply for the first twelve months of the scheme (i.e. until October 2011). During this period, a valid National Australian Built Environment Rating System (NABERS) Energy base or whole building rating obtained up until the end of the transitional period, can be disclosed instead of a full Building Energy

Efficiency Certificate (BEEC). The NABERS Energy star rating will need to be disclosed in any advertisement about the sale, lease or sublease of the office.

Requirements for a Building Energy Efficiency Certificate

The requirements to disclose a Building Energy Efficiency Certificate (BEEC) will commence in the second year of the scheme (around October 2011) and will include three components:

1. a NABERS Energy base building rating**
2. a tenancy lighting assessment
3. energy efficiency guidance.

** If a base building rating cannot be obtained due to inadequate metering, a whole building rating will need to be disclosed. NABERS energy ratings disclosed under the scheme must be exclusive of green power.

The BEEC will be valid for up to 12 months. At the time of disclosure, the certificate will need to be valid, current and registered on the scheme’s online central registry (currently being developed). The NABERS Energy star rating will need to be disclosed in any advertisement about the sale, lease or sublease of the office.

Tenancy lighting assessment and energy efficiency guidance

The tenancy lighting assessment will benchmark the existing tenancy lighting (that will be passed on to the incoming tenant or building owner) against best practice.

Accredited assessors will complete a relatively straightforward survey of the lighting and enter data into a calculator. The survey will be undertaken with the NABERS Energy assessment. A prototype calculator has been developed and will be refined over the coming months.

The energy efficiency guidance will provide general advice to building owners and tenants on common energy efficiency opportunities in commercial office buildings. The material will not be tailored to the individual building and will not be an energy audit. The scheme will not require building owners to undertake a comprehensive energy audit.

Both the tenancy lighting assessment and energy efficiency guidance will not be required during the transitional period.

Assessor training and accreditation

Assessments for BEECs will be undertaken by NABERS assessors who have also been accredited under the CBD scheme. Existing NABERS assessors will need to undertake additional training to become accredited. Details on the training will be provided in the coming months. This will supplement current NABERS training and accreditation scheme delivered by the NSW Department of Environment, Climate Change and Water. People wanting to become CBD assessors must first become accredited NABERS assessors, then complete the CBD training and have their application approved by the Department of Climate Change and Energy Efficiency. Note – accredited NABERS assessors do not need to be accredited under the scheme to assess buildings under the transitional provisions.

Advice for building owners

Energy use and sustainability considerations are increasingly becoming part of decision making processes.

A NABERS Energy base building star rating gives building owners a useful snapshot of their building’s energy efficiency. If you are thinking of selling, leasing or subleasing after

October 2010, it would be a good idea to get a NABERS rating. For further information please contact your local Apex Property Consulting office.


Disclosure Bill now before the Parliament House of Representatives

The ‘Building Energy Efficiency Disclosure Bill 2010′ is now before the Parliament House of Representatives. Current status is that it was referred to committee on 18 March 2010; Report due 11 June 2010.

Please refer to previous blogs for a concise overview  of the Disclosure Bill or visit the Parliament information web site.

If the bill goes through in its current form property owners ignoring and failing to comply with the mandatory disclosure legislation should note that they will face substantial fines through a National Administrative Unit, .



As NABERS is a fundamental part of Mandatory Disclosure the following gives an overview of the common ‘non technical questions’ we are regularly asked. The responses are concise and hopefully provide a useful source of information

What is NABERS?

NABERS (National Australian Built Environment Rating System) is a performance based rating system that measures an existing building’s overall environmental performance during operation. It is a national initiative managed by the NSW Department of Environment & Climate Change (DECC) and a voluntary performance based environmental rating system for existing office, shopping centers and hotel premises.

NABERS rates a building on the basis of its measured operational impacts on the environment.

The scheme benchmarks a building’s environmental performance on a scale of 1 to 5 stars, with 1 star being poor and 5 star showing excellence. A 3 star rating is currently considered best practice for Office Buildings.

NABERS Office is tailored for use by building owners, managers and building occupants with 3 types of rating

  1. Base Building (central services only) – Building owners and managers can report on those aspects of the environmental performance of the building that are in their control, for example landlord energy use (lifts, air conditioning, common area lighting and power).
  2. Tenancy  -  Building occupants can report on the environmental performance of the aspects of the building that they control (lighting and power in their tenancy).
  3. Whole Building  – A combination of both the above

 The NABERS rating tools generally consists of:

  • NABERS Energy
  • NABERS Indoor Environment
  • NABERS Waste
  • NABERS Water

 The most common used rating tools for Office are Energy and Water.

NABERS Hotel is for CBD type properties not resorts, it uses the same basic principles as NABERS Office but only the Energy and Water rating tools to provide the rating. It includes for all hotel based facilities excluding on site retail outlets.

NABERS Retail uses the same basic principles as NABERS Office but only the Energy and Water rating tools to provide the rating. It includes for all common area facilities in shopping centers above 15000 M2 Gross NLA that also have at least one major tenant. It excludes all on site non retail outlets and energy associated with lighting and power to individual tenants.

How does NABERS relate to other environmental ratings?
NABERS is unique and complements other environmental rating schemes available. For example Green Star rating systems developed by the Green Building Council of Australia are designed to assess the environmental ‘potential’ of buildings. These ratings establish how the premises will perform under ideal circumstances based on design information and management processes. The actual operational performance can only be determined from NABERS ratings.

Who manages NABERS?
Is a national initiative managed by the NSW Department of Environment & Climate Change (DECC). NABERS is available throughout Australia with accredited assessors available to perform accredited ratings in every state and territory.

Who can use NABERS?
NABERS provides property owners, occupants, investors and other stakeholders with a reliable and transparent method of assessing the environmental impacts of buildings in use.

NABERS can be used to define and set operational performance targets and measure and rate actual performance. Accredited ratings can be used to disclose and report on performance to interested parties (as with the imminent Mandatory Disclosure Act), establish commercial relationships for the monitoring and maintenance of performance targets, assist professional services to improve a rating and make decisions about priority actions or investment options.

Government agencies and councils may also be interested in the information that NABERS generates as a means of encouraging environmental improvement and providing incentives.

Why use NABERS?
The majority of environmental impacts from buildings is due to the operation of ‘existing buildings’ in the marketplace. Current rating systems in Australia and overseas are intended for use at the design and development stages i.e. Green Star, LEED and BREEAM. Whilst design is clearly of crucial importance, good design is no guarantee of sound environmental performance during operation.

It therefore makes sense to use a rating system that is specifically tailored for existing buildings, and that measures relevant impacts during the operational phase of buildings. NABERS provides a rating that a building owner/operator can reasonably assume responsibility for, rather than items that were decided possibly by another party many years ago and cannot be easily changed.

As NABERS is based on actual measured performance rather than on prescriptive design parameters, it is complementary to expert design tools and design-based rating systems.

How much will it cost and how long does certification last?
Each assessment and its associated fee is different for the respective property and will depend upon a number of variables i.e. type of property, time required on site, type of rating, level of information provided etc. Further to the assessment fee a separate rating application fee is required and payable to the Department of Environment and Climate Change. The rating application fee is currently set at approx $770.00 plus GST per NABERS Energy rating. City Switch discounts for the rating application fees may still be applicable for signatory tenancies which can offer a 50% discount for properties over 1000 M2

NABERS certification lasts for 12 months and is therefore re-assessed annually.

Can a NABERS application be declined?
Yes it can. NABERS accredited assessors work to a very strict validation protocol set by the Department of Environment & Climate Change. The rating requires a stringent set of procedures to be followed together with information to be provided by the building owners prior to a site assessment. For example, failure to furnish energy consumption data  for the nominated property etc will simply mean that a rating cannot proceed.

What information is required?
Your accredited assessor will advise what information is required. However, an example is:

  1. Confirmation in writing of NLA data from copies of certified drawings and measurements endorsed with a written statement that they were taken in accordance with the Property Council of Australia (PCA) Method of Measurement.
  2. Evidence of after hours air-conditioning requests for each defined functional space must be provided in writing.
  3. Energy consumption data for electricity (oil and gas if applicable) for the nominated property for the preceding 12 months, the most recent billing data must be no more than 3 months prior to the rating date. This information shall be provided only in the form of actual ‘energy bills or invoices’ from the energy suppliers.

How do you commence with a NABERS rating?
Contact a NABERS accredited assessor i.e. Apex Property Consulting. We would primarily recommend a ‘Preliminary NABERS Energy Assessment Report’ is considered to ascertain the viability of the NABERS formal rating and possibly establish cost effective areas to increase the rating prior to application.


Mandatory Disclosure Update

Environment Minister, Peter Garrett confirmed Australia’s governments have now agreed to a new national scheme to improve the energy efficiency of commercial office buildings. Australian, state and territory government energy ministers recently approved the parameters of the new mandatory disclosure scheme for office building energy efficiency, with Commonwealth legislation now being developed to give effect to the scheme in the second half of 2010.

The scheme will be implemented in two phases and owners who don’t comply will risk a fine or prosecution :

  • Phase 1 involves a national mandatory disclosure scheme for large commercial office buildings (2,000 M2 or larger)
  • Phase 2 involves consideration of expanding disclosure to other commercial building types, including hotels, retail buildings, schools and hospitals. Any extension to these buildings would be subject to further analysis of the impact.

Mr Garrett advised “If you are planning on selling or leasing office space, the first NABERS Energy base building star rating can take time. I encourage building owners to start now to prepare for the introduction of this measure”.


Mandatory Disclosure of Energy Efficiency – Are You Prepared?

With the proposed introduction of mandatory disclosure of energy efficiency from 2010 there is a clear message being sent by the Government. Property owners should therefore ‘be prepared’ and act now to ensure all possible enhancements to their existing assets are clearly identified together with any funding opportunities available.

Mandatory disclosure is rapidly moving from conception stage to compulsory requirement. Therefore, the following is a basic observation of the initial impact it will have for property owners and tenants who are selling, leasing or sub-leasing.

What is Mandatory Disclosure?

Commercial buildings account for at least ten percent of Australia’s greenhouse gas emissions which are predominantly caused by poor energy efficiency, poor energy management and outdated technology. The Government’s spotlight on the effects of climate change and Australia’s obligations under the Kyoto Protocol to limit greenhouse gas emissions has put the attention on the nation’s largest contributors. Therefore, in line with a world wide focus on reducing emissions, the Government in 2008 released a Regulation Impact Statement and Regulation Document for the introduction of ‘mandatory disclosure of energy efficiency’ for commercial buildings from 2010.

Mandatory disclosure will affect all owners and developers of commercial office buildings and tenants occupying premises with a Net Lettable Area (NLA) of 2000m2 or more and will also try to encourage smaller building owners and tenants to ‘voluntarily disclose’ information. The format is similar to the UK’s current scheme, known as the EPC (Energy Performance Certificate) and the DEC (Display Energy Certificate). This requires mandatory disclosure at the time of first interest for purchase or letting through production of an EPC. The EPC provides prospective purchasers and tenants with information on the energy efficiency potential of a building or tenancy with the DEC targeted at raising public awareness of energy efficiency within the building.

In addition to reducing greenhouse gas emissions the purpose of the mandatory disclosure scheme is to assist commercial buyers and tenants who will be able to compare a building’s energy efficiency when choosing to buy or rent. The other key objectives will be to overcome market impediments and ensure that both parties in a transaction have access to credible and meaningful information. This will also encourage incentives for energy efficiency improvements in office buildings and hopefully stimulate investment.

How does it work?

With the scheme any commercial building (initially only Class 5) to be sold, leased or sub-leased will require the following:

  • An accredited energy efficiency rating under the NABERS Energy star system for office buildings with NLA of 2000m2 or greater.
  • Mandatory disclosure of energy efficiency to any prospective buyers or tenants. This will comprise of a Building Energy Efficiency Certificate (valid for 1 year) and an Energy Efficiency Assessment Report (valid for 7 years).
  • Disclosure of the NABERS Energy star rating in any property advertisements.
  • Property energy rating details to be held in a central registry.

Management of the scheme together with regulation enforcement and monitoring systems will be from a new central administration unit.

The BEEC (Building Energy Efficiency Certificate) will be valid for 12 months from its date of issue and its proposed core requirements are, together with the building name and address, certificate reference number and validity dates:

  • Building data, including NLA.
  • Accredited Assessor details.
  • The appropriate NABERS star rating, including the type of rating.
  • Detailed energy consumption and emissions information.

An EEAR (Energy Efficiency Assessment Report) will be valid for 7 years. In addition to the information contained in a BEEC, the EEAR will target information in relation to improving a building or tenants energy efficiency through detailed analysis and advice, including:

  • Maintenance and operation issues, including information on the age and standard of equipment and related efficiencies.
  • Design and economic life analysis of major equipment with replacement costs.
  • A review of sub-metering and building management systems with information to improve the building’s energy efficiency, including potential changes to the associated building services and operational strategies.
  • A review of lifts and common area lighting.
  • A review of hot water systems.
  • A review of tenants’ general office equipment and appliances.

What will the initial impact be for property owners and tenants from 2010?

First of all we should observe that the design and construction of the majority of Australia’s existing building stock has far less efficient technology than the current new building stock. The average energy rating under NABERS Energy for commercial buildings is 2.5 stars on a 5 star system. Therefore, action to increase energy efficiency of existing commercial buildings will be required to enable compliance with the new regulation. A minimum NABERS Energy rating of 4 stars (base building) should be considered by property owners.

Successful property owners have the ability to adapt to meet market demands, which is reflected in their potential to attract tenants. Currently if a potential tenant demands an energy rating and efficiency report when considering a business premises the property owner, although under no obligation, will generally provide it. The new regulation will now make this compulsory as part of any purchase or lease. Therefore owners and developers will now have to ensure that their properties are competitive in the new more informed environment this new regulation will create.

Secondly, with mandatory disclosure building owners may not have considered:

  • The time required to undertake the EEAR and BEEC.
  • The specific data required to enable a NABERS Energy assessment in accordance with the associated validation protocols.
  • The actual availability of NABERS accredited assessors who can undertake ratings at possible short notice.
  • The actual time required to implement changes to achieve the required mandatory rating.
  • The impact on their existing tenants.

And more importantly, the influence the above has on a property sale under the new regulation when considering a typical due diligence period. In addition to potential expenditure associated with property upgrades, property owners will also be required to bear the cost of energy efficiency assessments and certification, together with additional application fees.]

From the above property owners should be aware that it will not be a simple case of achieving a rating within a couple of weeks of submitting a request. For works to be undertaken in the correct manner sufficient time and appointment of suitably qualified personnel will be required. There will also be an increased requirement for building services engineers and NABERS accredited assessors to work directly with property owners to achieve positive end results.

Undoubtedly, mandatory disclosure will establish a new precedent and introduces a real challenge within the market. True energy efficiency lies in the transformation and refurbishment of existing commercial building stock to support much greater sustainable environments. Property owners who embrace this challenge will not only reduce their energy consumption and costs but should also improve the value of their existing asset. Another consideration is the positive impact a good BEEC rating will have on valuation, reflecting rental premiums which have been proven in America.

In a more competitive market where energy efficiency is an important factor in acquisition or leasing, the advantage of a good energy efficiency rating should not be simply rejected without considering all the facts. With the intention to improve energy efficiency, it is worth considering that it is possible to reduce energy consumption for little expenditure by low cost ‘good housekeeping’ initiatives, sometimes significantly enough to increase a NABERS rating.

Whilst there is a downturn in property disposals and acquisitions this is an ideal time for property owners to get their ‘house in order’. Initially and prior to the introduction of mandatory disclosure this can be simply achieved by means of good advice and a preliminary audit to see where their asset sits in terms of a NABERS rating. This will give property owners a more informed understanding of where there building is currently placed in the market in terms of energy efficiency.