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Lendlease fund sets 2025 net zero carbon target

The Two Melbourne Quarter building

Lendlease’s Australian Prime Property Fund Commercial (APPFC) will become net zero carbon by 2025, one of the tightest targets set in the property sector.

The goal is being supported by the Clean Energy Finance Corporation (CEFC), which has tipped $100 million in equity into the $4.5 billion commercial property fund.

CEFC property lead Chris Wade told The Fifth Estate the investment would help Lendlease meet the “new industry benchmark” for carbon targets while specifically helping the Melbourne Quarter development pursue “a precinct-wide energy solution”, including the integration of energy efficiency, renewables, storage and virtual network technologies across multiple buildings.

There will also be a tenant engagement component. Mr Wade said there was a trend towards smart data, tenant engagement and whole-of-building approaches, and part of the deal struck was that learnings would be shared with the wider industry. A similar deal was struck with Investa in 2016.

CEFC chief executive Ian Learmonth said the body was working with developers to identify ways to get to net zero carbon as quickly as possible.

“A key focus of this investment is its ability to demonstrate, through the Melbourne Quarter development, how sustainability and design initiatives integrated across an entire precinct can transform the way we work and live, with zero carbon outcomes,” he said.

“This approach delivers emissions savings over and above what could be achieved in a standalone building, by networking and sharing technologies across the buildings and facilities within the development precinct.”

Reaching the target shouldn’t be too onerous, as the fund is already leading globally on sustainability, being the first to have a 6 Star Green Star portfolio rating, and last year being named the world’s most sustainable fund in the Global Real Estate Sustainability Benchmark.

It only invests in premium properties, with current holdings including International Towers in the zero-carbon Barangaroo South development.

While it is understood that Lendlease’s target setting was not contingent on the CEFC funding, the investment will help to push sustainability, particularly at Melbourne Quarter, and the partnership will include knowledge sharing on both sides.

“CEFC finance is helping developers forge new standards in sustainability and building design across the built environment,” Mr Wade said.

“This investment with Lendlease is another strong example of how clean energy can be used across the built environment to deliver long-term economic and environmental benefits. It provides a model for other precinct-scale developments Australia-wide.”

Lendlease Investment Management managing director Josh McHutchison welcomed the CEFC investment.

“CEFC’s investment in APPFC forms part of the fund’s most recent equity raise,” he said.

“We look forward to working with the team at CEFC to implement innovative solutions to achieve our sustainability aspirations and deliver superior outcomes for our tenant community.”

The Lendlease-masterplanned Melbourne Quarter is targeting 6 Star Green Star ratings for all commercial buildings and will host one of the city’s largest solar installations. The first stage is set to be completed this year, and when all stages are completed will accommodate 13,000 workers and 3000 residents.

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