There’s a big shift underway for buildings that use gas towards full electrification in Australia, as the transition to a low-carbon economy ups the pressure on these assets, Colliers’ Lisa Hinde says.  

Hinde, the Head of Sustainability, Real Estate Management Services at Colliers International, said upcoming changes to NABERS – the National Australian Built Environment Rating System – were a major reason why landlords with buildings that use gas were considering full electrification. 

In 2025 and 2030, the NABERS emissions factors will be adjusted and will be directly related to the growing volume of renewables in the grid, she said. 

Hinde shared an example where under the 2025 and 2030 adjustments, a building with 4.5-star NABERS rating that currently uses gas may see its rating rise or fall depending on whether it retains gas.  

“If it continues in line with its current efficiency and it removes gas, its rating will go up once the emissions factors change,” Hinde said.  

“If it retains gas, its rating goes down. So, what this is signaling to the market is that it’s time to transition out of gas if you want to retain your current NABERS rating. We’re seeing little challenges, particularly in markets where there’s high government tenants because they need to retain their current NABERS rating to satisfy their green lease obligations. Otherwise, those tenants will leave. We’re seeing quite a big shift in terms of buildings adopting electrification, just purely off the back off that change.  

“It will affect valuations moving forward, particularly when you’ve got assets in places like Canberra. If you have a fully electrified building in Canberra, where it’s a 100% green grid already, you could have a net zero asset. 

“For a lot of investors who have that net zero mandate, it would be far easier for them to invest in a property in Canberra or other states and territories that have a growing renewables penetration in the grid than it would be for somewhere like Queensland, where the renewables is quite low.” 

Hinde said the transition away from gas was important because net zero buildings and vehicles can’t be powered with combustion-based fuels. 

“The transition away from gas in buildings and petrol in cars is happening because we know that, when we electrify these assets, we can control the source of that generation through increasing renewable energy generation. The way that industry’s responding to that and back to that global piece around investors, they’re looking to park money in electrified assets,” Hinde said.  

Nicky Landsberge, Partner in the Climate Change and Sustainability Services Team at EY, said a lot of modelling showed the demand for electricity was rising. 

“It can be a little counterintuitive to what you’re expecting because you almost want to see electricity demand go down because we want to decarbonise and we know the energy sector is actually a high emitter currently,” Landsberge said.  

“But a lot of that demand is driven by electrification of not just buildings, but electric vehicles and the charging facilities that are provided by buildings.” 

In terms of the infrastructure needed for buildings to transition away from gas, Hinde said the Green Building Council had done a lot of work in that space.  

“The Green Building Council have developed an electrification guide for new buildings that was released earlier this year,” Hinde said.  

“So, if you have any development friends that are putting up big towers at the moment, hand it to them because the gas in their buildings will be redundant very soon. And what they’re about to release is an electrification guide for existing buildings to help teams like ours navigate, if we’ve got a 2030 or 2035 or 2040 or 2050 target, how to progressively budget for those changes as they’re needed. The City of Sydney are working quite closely to create practical tools to guide the transition too.  

“As a society, we have to really adapt and work out what we need to do, but I think it’s the only path we have forward if we’re going to meet our net zero targets either at a state level or federal level.” 


Hinde and Landsberge spoke at the Australian Property Institute’s NSW 57th Annual Kiparra Day Conference in August. 


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