Global warming is
real. Burning fossil fuels is a significant contributing factor, and we must
play our part in reducing emissions.
Consumer trends
will also demand lower-emission products and innovation. Entrepreneurship and
business will need to find solutions to the challenges that we collectively
face.
Property Brokers
manages nearly $3 billion worth of residential real estate across the country,
collecting over $160 million in rent annually. It is a considerable challenge
managing such an asset. One of the main challenges is the age of the property
that we manage and the upkeep of maintenance. We operate in provincial New
Zealand outside the main centres of Auckland, Wellington, and Christchurch.
Many of the small provincial towns that we operate in have dated housing stock,
and there needs to be more in the way of new developments being built. Take
places such as Tokoroa, Taumarunui, and Westport, for example. There needs to
be more in the way of new housing developments being built here. The age and
condition of much of this stock is dated and needs retrofitting. This becomes
more apparent as we enter the winter months.
Healthy homes have
gone some way in helping. However, as I have previously written, it needs to go
further.
We have recently
surveyed over 350 landlords nationwide, and in the survey, we asked, 'Would you
be interested in knowing what the emission of your rental portfolio is?'
What came back was
fascinating but may not entirely be surprising. We had a 50-50 split as to who
was interested. Then we drilled down into the data. Over 80% of landlords over
40 were not interested. However, of the 50% of people interested in knowing,
over 80% were younger than 40. This highlights the generational shift in
attitudes towards climate change. It also gives us important information on how
to future-proof our business.
Early this year, we
started to work on an ambitious project. I had a theory that properties with
lower emissions would achieve a higher rent than those with higher emissions.
Therefore, lower-emission properties will present a higher value. What if we
decided to establish what our properties' emissions are? Can we provide
incentives to landlords to reduce this?
If we measure
emissions and demonstrate how we can reduce this, could we offer Green Loans to
landlords to invest in their properties? We can demonstrate to landlords that
they can increase the value of their properties by carrying out renovations
that reduce the carbon footprint. Many banks now offer low-interest rates for
Green Loans. The extra rent will likely cover the cost of the interest, and the
asset will increase in value.
Property Brokers
have partnered with Valocity Global, which has developed a purpose-built
automated rental valuation tool. We have also partnered with their sister
company, Generate Zero, which is currently building a platform that landlords
can use to get estimates on the emissions of their properties. To do this, we
must provide sufficient information on the property, such as age, location, and
size.
From this, Generate
Zero can provide an estimate of emissions. We can then drill down even further
into building materials and, with tenants' consent, power bills to track power
consumption. Our first step is establishing the total emissions of the
7,000-plus properties we manage. We can then set targets to reduce emissions
whilst also increasing the value and income of the asset.
It is a win-win all
round. Tenants have healthier properties with better outcomes around health and
well-being. Landlords have better quality properties that increase in value and
income whilst everyone benefits from reduced carbon emissions. We aim to launch
this product in the Spring, which could be a game changer for our industry.
