About the Webinar
Building on our last session, Preparing for the 2025 NABERS Requirements for Government Leases, today we’ll take a more practical look at achieving the headline requirement – 5.5-star NABERS Energy. Our expert panel will share strategies for buildings at different stages - those already meeting the target, those just below, and those needing significant improvement.
The expert panel
- Zoe Baker, Sector Lead for Office at NABERS
- Ed Cotter, Director of Strategic Sustainability at JLL
- Howie Mann, VP of Product from our hosts, market-leading analytics provider CIM
Transcript
Welcome & Introduction
Anthony:
Welcome everyone. I'd like to begin by acknowledging the Traditional Owners of the land on which we meet today. For me, I’m on the land of the Boon Wurrung people of the Kulin Nation. We recognise that these lands have always been places of learning through storytelling and shared experiences. We pay our respects to their Elders past, present, and emerging.
On behalf of CIM, welcome to today's webinar. We’ll be taking a practical look at how to meet the 2025 government lease requirement of a 5.5 star NABERS Energy rating. Our expert panel will share strategies across a range of building performance levels—from already-compliant to needing significant upgrades.
Joining us today are:
- Zoe Baker, Sector Lead for Office at NABERS
- Ed Cotter, Director of Strategic Sustainability at JLL
- Howie Mann, VP of Product at CIM
Unfortunately, one of our scheduled panellists couldn’t join us today due to unforeseen circumstances, but we hope to welcome them in a future session.
Policy Overview & Market Progress
Anthony:
To kick things off, I’ll hand over to Howie for a quick overview of the policy and where the industry is at.
Howie:
Thanks, Anthony. And thanks to everyone joining us over lunch. We’re heading into one of the most significant policy shifts in over 18 years with the Net Zero in Government Operations Strategy.
From 1 July 2025, any new government lease over four years and more than 1,000 sqm must be in a building with a minimum 5.5 star NABERS Energy rating. This is up from 4.5 stars, meaning a 38% energy efficiency improvement—or 25% if you’re currently sitting at 5 stars.
Most current federal government leases don’t meet that benchmark. As those leases come up for renewal, tenants will either need to move to compliant buildings or require current landlords to upgrade. That’s a big wake-up call for building owners.
In terms of readiness:
- Over a third of NABERS-rated buildings currently meet the 5.5 target.
- Among Tier 1 REITs (e.g. GPT, Charter Hall, Lendlease), over 40% of stock is already compliant.
- Non-tier 1 portfolios are lagging significantly.
We’re seeing a “flight to quality”—federal tenants are gravitating toward higher-performing assets, and the rest of the market needs to catch up.
Panel Discussion
Anthony:
Thanks, Howie. Let’s move into some practical advice. We’ll start with strategies for buildings already above the 5.5 target.
Ed:
To maintain that high rating, you need:
- A strong asset and facility management team
- Regular tracking of NABERS methodology updates (e.g. changes around GreenPower inclusion)
- Tenant partnerships through data-sharing and green leasing
- A clear business case for maintaining and improving efficiency
Zoe:
Totally agree. High-performing buildings should never be "set and forget." There should be continuous engagement—leveraging indoor environment metrics, co-assessments, and joint performance goals with tenants.
Anthony:
We’ve got a great question from the audience: If the government tenant occupies the whole building, is a whole-building rating required?
Zoe:
Great question. Technically, NABERS is a base building rating, but if it’s fully tenanted by a government agency, a whole-building rating is often required. We don’t write the legislation—we provide the tool to meet it. So always check the contract language.
Anthony:
And another: Does a higher NABERS rating equal a rental premium?
Ed:
There’s a strong correlation. CBRE data shows that tenants are demanding high-performance, electrified spaces.
- In Sydney, 74% of corporates have a net zero target.
- In Melbourne, it’s 64%.
- There’s a huge gap between demand and supply—especially for electrified, 5.5+ rated buildings.
Anthony:
Howie—can solar PV help a base building hit the 5.5 target?
Howie:
Yes, solar reduces overall consumption, which improves NABERS outcomes. It’s especially effective in retail with large roof areas, but can support office buildings too depending on roof size and system efficiency.
For Buildings Just Below 5.5
Ed:
There are three tiers here:
- Minor tweaks and optimisation
- Moderate refurbishments (supported by a net zero pathway or capex action plan)
- Major repositioning (sometimes not worth the investment)
Having a clear business case and engaging with tenants early is key.
Howie:
Technology plays a huge role—especially platforms like CIM. You need data, operational tools, and aligned teams. Without operationalising sustainability, capex upgrades won’t deliver.
Zoe:
Live feedback tools (like built-in NABERS calculators) help test changes before the annual certified rating. And green lease clauses can unlock shared operational improvements between landlord and tenant.
Demand for Other Ratings (Water, Waste)
Zoe:
Energy and water are often rated together—it’s easy. Waste isn’t mandatory, but it’s tangible and engaging for tenants. Using waste performance to open energy conversations is a useful strategy.
Anthony:
What's the difference between NABERS and Green Star?
Zoe:
Green Star covers a broader sustainability scope. NABERS Energy ratings feed into Green Star Performance credits. The tools complement each other, and NABERS can help fast-track some Green Star submissions.
Howie:
We’re seeing international corporates adopt 5.5 stars as a requirement too. WSP, for example, added a clause allowing them to exit their lease if Brookfield doesn’t meet electrification upgrades.
For Buildings Well Below 5.5
Zoe:
Use data to understand what’s dragging performance down. NABERS reverse calculators can show how much energy must be saved for a rating jump. That builds a solid business case and helps justify investment.
Ed:
Some “stranded assets” won’t justify upgrades. But those assets might be repositioning opportunities for other investors. With ESG becoming more prominent, even divestment can be strategic.
Low-Capex Strategies & Green Finance
Ed:
Presenting a business case with net zero alignment increases access to green finance. Lenders are willing to offer better rates for aligned assets.
Zoe:
Green loans can deliver big savings. It's not just sustainability for the sake of it—it can reduce your cost of capital too.
Performance-Based Contracts & AI
Howie:
We’re seeing increased use of performance-based FM contracts tied to NABERS targets. AI platforms like CIM are now mandated in workflows, not just “nice to have.” They flag root issues and allow optimisation in real time.
Zoe:
Greenwashing is less of a concern in Australia due to third-party verified rating tools like NABERS and Green Star.
Electrification & Future NABERS Changes
Howie:
Electrification is critical—but challenging. Moving off gas impacts upfront costs and short-term emissions. There’s growing acceptance of tech-driven control, and we’ve even developed tools that automatically adjust building settings to meet energy performance goals.
Zoe:
We’re phasing out GreenPower from star calculations soon and shifting to renewable energy indicators. NABERS methodology updates will reflect evolving policy and grid inputs—stay tuned.
Capex Prioritisation Across Diverse Portfolios
Howie:
Start with metering—are you being correctly measured? Then:
- Optimise what you already have (HVAC = 70% of base building energy use)
- Plan smart upgrades
- Only then consider larger interventions like solar
Every building is different, but the key is acting quickly and pragmatically based on data.
Wrap-Up
Anthony:
That brings us to the end of today’s session. Thanks to our panellists—Zoe, Ed, and Howie—for sharing such valuable insights. Thanks also to our audience for the excellent questions. Please complete the short survey as you exit, and we hope to see you at the next webinar.
Note this is AI-assisted, so there may be some minor transcription errors.
