Better Building Partnership Annual Dinner

Hello, everyone.

I'd also like to acknowledge Bruce Precious from GPT who's chaired the Better Buildings Partnership since its inception in 2011, and done a fantastic job of steering it towards the achievements it can now boast. I thank him for his generous devotion of time, energy, skills and commitment to the partnership, and I know you'll all join me in those thanks.

Perhaps it's testament to what a great job he did that his place is being taken by two people, and I'm pleased to have this opportunity to welcome them.

They are Emlyn Keane, head of property management and sustainable performance at AMO - and a long-time chair of the BBP's Tenant Engagement Technical Working Group. He is joined as Co-Chair by Paul Edwards, group general manager sustainability for Mirvac, and a former chair of BBP in London. I thank them both for taking over from Bruce.

The Partnership is a significant element in our strategies to make Sydney a leading sustainable city.

Sustainability will be the bedrock for a globally competitive city, with an innovative and thriving economy. It is the only way forward - and one which our regional competitors are embracing with enthusiasm.

It makes sense if we are to deal with global warming and attract the creative young workforce that global businesses require.

Commercial office buildings are responsible for half of the city's total emissions. Twenty-five per cent of those emissions are contributed by tenants, and another 25 per cent can be controlled by the building owners.

That's why our collaboration with you is so vital in achieving our 2030 goals.

The CitySwitch Green Office program - which we run in partnership with a number of other councils and government departments - tackles the tenancies.

And since 2011, the Better Buildings Partnership has been tackling the buildings.

Sydney's commercial office sector is already recognised as a global leader. Indeed, a 20-10 international survey noted that "property companies from all over the world can learn from Australian best practices in environmental management".

But other cities are catching up, so we need to maintain our level of engagement if we are to make a six-plus NABERS star rating the average for Sydney property.

As Chris Derksema will shortly tell you, the Partnership has delivered a 27 per cent reduction in absolute emissions, despite increasing square meterage by 16 per cent in the same period. By the end of the 2012-2013 year, the target of a 21 per cent reduction on 2006 emissions was actually exceeded, with a 27 per cent reduction achieved.

These are terrific results but a major challenge remains in a softening market where green attributes can easily drop off the agenda in the race to secure deals. An IPD Australia survey indicates that a 4.5 star rating maximises rental return and capital gains, while a five or six star rating gives less return proportionate to the additional investment required.

So we need to find other ways to create value in that investment, whether through rate rebates, increased occupant density - quite feasible with activity-based work environments - or through continuing government incentives.

So there is plenty more for us to discuss and I hope you will keep working with us to improve our building stock and our reputation as an innovative and thriving sustainable city for the future.