Alongside the $30 million senior debt facility secured from the CEFC, Forza has raised $27 million in equity from its high net worth investor base to finance the acquisition and transformation of 200 Creek Street, which will sit within a single-asset unit trust.
The building is two-thirds occupied – major tenants include South East Queensland Water, Integral Group and Ramsay Health – and Forza is targeting a 7.7 per cent yield once the building is refurbished and fully leased.
Demand for energy efficiency
Upgrades to be undertaken by Forza include installing energy-efficient heating, ventilation and airconditioning, as well as solar panels and battery storage.
It will also upgrade the building’s lift and building management systems, refurbish the lobby and build a dedicated end-of-trip facility.
Once completed, the upgrades are expected to deliver a 55 per cent reduction in emissions, leading to the direct abatement of 415 tonnes of carbon dioxide a year or 7128 tonnes of CO₂ over the lifetime of the building.
The green bank’s funding for Forza’s Brisbane project comes amid a growing focus on sustainability and carbon reduction across the commercial property sector.
At last week’s AFR Property Summit, Lendlease global CEO Tony Lombardo and JLL Australia and NZ boss Stephen Conry were among those to highlight the investor and tenant push for energy-efficient buildings.
“So if you’re not thinking about refurbishing your old building, you’re in trouble,” Mr Lombardo said.
Federal Liberal MP Tim Wilson, who was appointed Assistant Minister for Industry, Energy and Emissions Reduction in October, lauded the Forza project and the funding provided by the CEFC.
“By setting up these demonstration projects, you not only show how a technology-based approach to emissions reduction works, but you prove to the property sector that it can work so that they make the decision to invest in their own stock,” Mr Wilson told the Financial Review.
CEFC CEO Ian Learmonth said refurbishing existing commercial buildings would have a powerful impact on the emissions and livability of Australian cities.
“It will transform them into energy-efficient performers that support Australia’s transition to low emissions, while retaining their competitive edge,” he said.