Renters and investors see green buildings as the new blue chip
Sunday, 3 May 2026
Developing green commercial properties is not just about ticking a box for Argosy Property - it’s about building a better future, and derisking its business, it says.
That’s why sustainability and climate adaptation have become central to the NZX-listed property company’s vision and strategy - and bottom line. Green properties are premium grade properties, which makes for higher rents and prices if resold, and overseas investors have a preference for them.
The built environment contributes about 20% of New Zealand’s carbon emissions, and in recent years the commercial real estate sector has increasingly focused on improving the environmental performance of its buildings.
Read more:
Listed companies have been subject to mandatory environmental, social and governance (ESG) reporting since 2023, but Argosy began to incorporate sustainable policies and initiatives into its building practice over 10 years ago.
The company’s first major green building was Te Puni Kokiri House in Wellington, which achieved a 5 Green Star built rating back in 2014.
Since then the company has delivered a Green Building Council certified net zero carbon building (82 Wyndham St in the Auckland CBD), and gained the third five green star rating for an industrial warehouse in New Zealand (the Mighty Ape building in Auckland’s Silverdale).
These days the company has a pipeline of green value-added industrial sites in development, and is working on transforming its portfolio into a 50% green portfolio by 2031.
It is advancing towards that target with 37.6% of the portfolio made up of existing or nearly completed green properties, it reveals in its most recent financial results, for the six months to September.
The company’s strategy centres on transforming existing brownfield sites into modern, sustainable environments that enhance tenant wellbeing and long-term value, it says.
Saatyesh Bhana is Argosy’s head of sustainability, and part of the company’s executive team. He took the Sunday Star-Times on a tour of some of its Auckland properties to demonstrate what building green means in practice, and why it matters.
Industrial park adaptation
First stop on the tour was 8 to 14 Mt Richmond Dr, a 10.6ha property in Mt Wellington where Argosy is developing an industrial park. It has six sites that will be developed on demand, with stage one of construction nearing completion.
Stage one features a 5833sqm warehouse and office building that has been leased to Viatris Limited, a global pharmaceutical distributor, and two platforms.
The building has been designed to achieve a 6 Green Star design and as built rating, and for climate change of up to 3.8C. Low carbon design materials and manufacturing processes were used in the build, and it has 302kw of solar panels, rainwater harvesting tanks, and EV chargers.
It also has an energy management system, an energy efficient heat recovery air conditioning system, and intelligent LED lighting with daylight and occupancy sensors.
Bhana says climate adaptation has become a big consideration for Argosy since the 2023 Auckland floods, and on this site rainfall was the criteria they targeted.
That led them to put in rainwater culverts and an overland flow path on site, and a large number of downpipes on the warehouse building. The building and all structures are 300mls above the ground which doubles the site height, and there has been extensive native planting to absorb rainwater.
It means that if there is flooding the water would run away from the building on the overland flow path, and to the lowest point at the bottom of the road, which makes the site more resilient, he says.
“But it’s also about minimising the impact of operating on a property, so we’re adopting such measures now on the industrial sites we’re developing.”
Occupier-centric drivers
The next stop is a recently completed double warehouse property at 224 Neilson St in Onehunga. One of the warehouses has got a 6 Green Star design and as built rating, the other is in the final stages of obtaining the rating.
There is a 3260sqm breezeway, 600sqm of office space, and 88 carparks, including 19 EV charging parks, plus cycle parking. The buildings feature sustainable design elements, including low carbon concrete, rainwater harvesting, intelligent lighting and air conditioning, and 440kW of solar panels.
The facilities are premium grade, which is a key consideration for Argosy which takes a long-term view with its buildings as they manage them, Bhana says.
“When you have green buildings, if you run them well, and you've designed them and they're built well, you have less call outs, and less maintenance problems.
“It’s also about being occupier centric, really working around the occupant and looking after their environment, and well-being. That’s important because we’re a service provider of real estate.”
Green buildings are not just about ticking boxes, they have to be about ensuring tenants are comfortable, and enjoy the space, he says.
“That works for our occupiers too because providing a great environment for employees brings people into work, and we’ve noticed our green buildings have a higher rate of return to work than the non-green ones.”
Creative office reuse
The last property on the tour is an office property that sits on the fringes of Auckland’s CBD at 105 Carlton Gore Rd in Newmarket. It was upgraded and retrofitted to a 6 Green Star rating rather than built new.
While the existing structure of the building was used, some structural tweaks were made, and high performance, double-glazed facades with increased insulation were installed. Materials were recycled where possible, and a 92% diversion from landfall rate was achieved.
The building is rated five and a half stars out of six for energy efficiency, and has solar panels on the roof, an air handling unit that tempers air entering and leaving the building, and programmable lights, which provide temperature readings and heat maps.
Biophilic design, particularly in the greenery-filled lobby, shapes the look and feel of the space, there are cycle parking and end-of-trip facilities, and a lobby directory board that shows real-time data on solar generation and water usage in the building.
Bhana is particularly fond of this building, and says it showcases the need to take a holistic approach to creating green buildings, something which is becoming more mainstream.
“Our approach has long been to take existing office buildings, and reuse them - which in itself is more sustainable than building new, and we’re actually creating a more superior product that enhances tenant wellbeing.”
Why sustainability matters in real estate
It was the desire to provide the company’s tenants with better properties that set Argosy on its green path, but early on they created a value equation for energy and in turn cost savings, he says.
The equation resonated with chief executive, Peter Mence, and the board has been supportive from early on, adopting a green focus as a key strategy for the company.
Bhana says that support has made all the difference, but another trigger was the company’s move to become the first bricks and mortar listed vehicle to do a green bond.
“It was great for us from a credit point of view, but it was also a catalyst for us to look at what compliance, sustainability and verification really mean, and it's just taken off from there.
“We also realised that Australian investors, and REITs, are not keen to invest in anything that is not green. Any assets over $5 million have got to be green because otherwise they won’t sell to anyone other than New Zealanders.”
Green buildings are also more attractive to tenants, so if there are two buildings at the same cost, and one sustainable but one is not, they will go for the sustainable one, he says.
“That means they generally have lower lease up periods, and tenants tend to stay for longer, so we have a high renewal rate.
“For us, property is a long-term, strategic business. Building green and having valid sustainability credentials is about protecting and de-risking properties, and that leads to diversification, saleability, and liquidity.”
Argosy owns a $2 billion portfolio of industry, office and large format retail properties around the country. It includes flagship properties such as the Citibank office block in Customs Street, and the Albany Mega Centre, both in Auckland.