Forcing landlords to disclose green rating of buildings could save ‘millions’
Monday, 4 May 2026
Making it compulsory for commercial property owners to disclose the energy efficiency of their buildings could save millions in energy costs, but the Government seems reluctant to go down that path, the Green Building Council says.
Winter is coming, and with it concerns around energy supply and costs. Last winter expensive, dwindling natural gas supplies and rising electricity costs and demand hit businesses and households hard.
That makes improving energy efficiency critical, and as buildings are big energy consumers the commercial property sector is a logical area to focus on, the Green Building Council’s chief executive Andrew Eagles said.
“Buildings and homes use 23% of all electricity and 15% of all gas directly, and more gas is also used to generate electricity for use in buildings. But we can’t manage and improve energy efficiency without measuring it widely.”
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In the commercial property sector NABERSNZ is a tool used for the measuring of energy use and the certification of energy efficiency in office buildings, and uptake of it has been growing.
Eagles said that in 2018 the council was using the tool to rate 20 to 30 existing buildings per year, and a large rise in demand meant it was on track to hit 300 ratings this year.
Many building owners had used their rating as a springboard to make improvements to their buildings, lower energy use and operating costs, and reduce carbon impact, he said.
“That’s because assessors can help identify areas where owners and tenants can improve energy performance to make immediate and long-term savings, often without additional capital spending.”
Recently the tool, which is administered by the council and supported by the EECA, has expanded so it is available to shopping centres, retail stores, warehouses and cold stores.
The expansion was a great development for the sector as it was a powerful tool for building owners to provide more efficient buildings, Eagles said.
“But we are still missing the real win which would be the Government moving to require NABERSNZ ratings on large office buildings, which the sector and the Property Council have been calling for years.
“So business is behind it, but the Government, which is supposed to be a pro-business government, seems reluctant to make ratings compulsory.”
He said Australia introduced a commercial buildings disclosure regime for buildings over 1000sqm in 2009, and owners had to declare how energy efficient a building was when selling or leasing it.
“Not only did that programme lead to a big increase in buildings being improved and going from one star to four or five star ratings quite quickly, but it has saved about $2 billion in energy costs.”
A similar disclosure regime was needed in New Zealand because while about 10% to 15% of building owners were pro-active in monitoring and reporting energy efficiency, the bulk of the market was not, he said.
But in recent years awareness that the built environment was responsible for about 20% of the country’s carbon emissions had increased, and that had led to momentum in the “greening” of commercial property.
PMG Funds chief executive Scott McKenzie said the drive towards greener, more sustainable commercial buildings was not going away, despite some of the rhetoric from around the globe.
For owners of commercial real estate sustainability was not just about the environmental benefits, it was also about the operational efficiency of buildings, he said.
“ESG strategies mean owners have to create better environments for people, and if they do that they are more likely to attract and retain good tenants, and get better returns.”
He said there was increasing adoption of solar panels and technology, and AI powered data management systems for building ventilation, air conditioning, and water usage in the sector.
PMG had introduced these features into its commercial buildings, and had NABERSNZ ratings. It also made extensive use of recycling practices to divert waste from landfill, and was working to reduce its carbon footprint.
While growing numbers of owners were conscious of responsibilities as corporate citizens, there were still a lot who were not, McKenzie said.
“Tenants are our customers so we need to listen to them and meet their expectations, and they want great environments, and ratings like NABERSNZ and Green Star.
“To improve uptake, responsible operators should take the lead and share their knowledge, but maybe there should also be a requirement for buildings of certain types to have ratings.”
It was all about using data and technology to make better decisions and improvements for the good of tenants, the business, and the environment, he said.
For Chris Dibble, head of research at commercial real estate firm JLL, it was clear that greener buildings were more attractive to tenants.
The vacancy rate in prime-grade office buildings with sustainability ratings was significantly lower than the broader market vacancy rate, JLL’s latest Auckland and Wellington CBD office survey showed.
It put the overall CBD office vacancy rate across Auckland and Wellington at 16.6%, with that rate tightening to 9.9% for prime space.
But prime buildings with both Green Star and NABERSNZ ratings had a vacancy rate of 7.6%, while in NABERSNZ rated prime buildings vacancy sat at just 4.2%.
There were now many occupiers who were looking for more modern space in buildings that operated as effectively as possible, and placed a lot of importance on it, he said.