LReit keeping its eye on the green prize
The real estate investment trust is staying on the green path – and taking as many as it can with it
Vivien Ang
BEFORE they call it a night, FairPrice staff working at the Jem outlet will place non-organic waste items, which include plastic packaging and carton boxes, at a designated collection point for recycling.
This is an act of commitment by both the Jem mall tenant and landlord Lendlease Global Commercial Reit (LReit) in their joint effort on a green journey.
Joelle Chen, sustainability director of Lendlease Singapore – the parent of LReit – said: “It is important for buildings to be green as compliance is now more stringent. For asset managers who are already on the journey, this ensures that the buildings they manage are always top performing. The cost of non-compliance involves carbon taxes levied on large emitters such as energy-generation companies. Eventually, for poor performing assets that are not green rated, it would mean higher energy cost.”
Jem is the crown jewel of LReit’s green buildings, with features such as sky terraces that wrap every alternate office floor, creating walls of green. Its vertical green walls also provide shade, cool interiors, and help buffer the mall from traffic noise.
All this is on top of the mall’s energy conservation practices – such as a highly efficient air-conditioning system, regenerative lifts and extensive use of LED lighting. They make it possible for Jem to cut down on energy consumption by about 13 gigawatts per hour (GWh) annually – equivalent to the power used by about 2,400 public housing flats each year.
And of course, with natural daylight pouring into offices on the perimeter of the floor-plate, the need for artificial lighting is reduced.
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The mall was acquired by LReit in April 2022 from 2 private funds.
LReit has continued to do its part in waste management through simple gestures, such as collecting non-organic waste from retail tenants twice a day and encouraging shoppers to toss waste into conveniently placed recycling bins.
Used kitchen oil from food-and-beverage tenants are also recycled into biofuel. The green corner at the waste management room are where tenants can recycle paper, aluminium cans, glass bottles, and plastic.
Jonas Kor, director of corporate communications at FairPrice Group, said: “Being located in a mall that integrates high-tech eco-friendly processes in its business operations makes it convenient for landlord-tenant collaboration in managing waste and recycling efforts efficiently and effectively. The importance of recycling is in line with FairPrice’s commitment to environmental sustainability in our operations, and promotes a circular and low carbon economy.”
Another tenant, IKEA, is also part of the effort to go green.
IKEA Jurong store manager, Nur Diana Abdullah, said: “At IKEA Jurong, our first store to be located in a mall, we do not manage our cardboard and plastic waste directly – which is why we are glad to be in a mall with a landlord who shares our approach to caring for the planet.
“We do everything we can to support the global IKEA ambition to become circular and climate positive. That’s why we continually work to reduce the waste we generate in our operations and recycle more than 77 per cent of it.”
Asked about the biggest misconceptions about a building being green, Kelvin Chow, chief executive officer (CEO) of the manager of LReit, said: “In our opinion, green premiums could be one of them.”
He said that while companies may have to pay a higher price to rent or acquire buildings with certified sustainability credentials, green strategies can drive higher occupancy, rents, tenant retention and offer overall higher value.
“Today, creating sustainable spaces is no longer about simply increasing their value. It has become a corporate priority. Investors are putting on the ESG (environmental, social and governance) lens and placing more emphasis to invest in companies that have ESG strategy.”
Hence, since LReit was listed in 2019, all the assets under its portfolio are green assets.
It has also bagged various ESG-related awards since its listing, including the BCA Green Mark Platinum Award for 313@somerset. The mall’s atrium daylighting design maximises the use of sunlight, minimising the requirement for artificial lighting during the day.
Its 3 buildings at Sky Complex in Milan also possess Grade A office specifications boasting an excellent energy efficiency profile, and it received the highest-tier 5-star rating and was the Regional Sector Leader in GRESB for two consecutive years since listing.
Chow said: “Our ESG investment criteria is that the asset must have good sustainability rating under rating schemes such as BCA Green Mark, US Building Council’s LEED scheme or equivalent. In the absence of such ratings, it must demonstrate sustainable features and the potential to incorporate them in future.
“In addition, there must be no environmental risk or legal restrictions associated with the asset, which is in compliance with local regulations and Lendlease’s Global Minimum Requirements. With increasing importance placed on the sustainability performance and green certification of the assets, we expect sustainability financing to be a common financial instrument to fund acquisitions that have strong sustainability credentials.”
He added that LReit is a signatory to the United Nations’ Principles for Responsible Investment, and approximately 60 per cent of LReit’s borrowings are sustainable financing.
“We hope to see a future in which sustainability standards become a hygiene factor for all financing. It is heartening to see real estate owners as well as the financing community take responsibility to contribute to this change.”
On Lendlease Singapore’s future plans, Chen said that it will continue to implement energy efficiency initiatives to maintain top performance in green building ratings and increase the use of renewable energy to 100 per cent by 2030.
The real estate investment trust (Reit) will also develop and pilot the next generation of green leases for tenants, and educate them to reduce emissions.
Chen added: “For us as a group, we have started taking steps towards decarbonising our assets and operations, and have committed to our Mission Zero – net zero carbon by 2025 and absolute zero by 2040. These are one of the most ambitious targets to date for the real estate sector, and we believe that it is essential for us to meet our climate goals, given that buildings are responsible for almost 1/3 of global energy consumption. Together, with like-minded leaders, let us all do our part in taking responsibility for the planet seriously.”
This article highlights sustainability causes, supported by Lendlease Global Commercial Reit
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