10 Valentine Avenue, Parramatta

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Government Property NSW approached their landlord Australian Unity Investments about helping fund a lighting upgrade using an Environmental Upgrade Agreement (EUA). This followed an energy audit that identified that replacing T8 fluorescent lighting with T5 and LED lighting would save $200,000 a year. This corresponds to a 70% decrease in the tenants energy bills.

Australian Unity Investments were able to utilise some of the energy savings received by the tenant Government Property NSW. They recovered just over 40% of the upgrade costs through outgoings, making the EUF cheaper than both cash and traditional debt. Government Property NSW saved $130,000 pa and contributed $110,000 pa through outgoings. With the $30,000 pa of maintenance savings received the tenant saved over $50,000 pa, received energy efficient lighting in their tenancy and did not incur any capital outlay.

“We were aware that to keep pace with the competition in the market place, we needed to listen to our tenants. We saw that the EUA mechanism made good sense and we were more than happy to work together to negotiate the EUA for this lighting project. We found this form of funding no more complicated than a typical commercial loan and the contributions from the tenant made this very worthwhile financially.” Australian Unity Investments, Grant Nichols, Property Portfolio Manager

The EUA provided the landlord with the financial incentives to bring forward the lighting works and complete the upgrade outside the leasing cycle. The lighting works also qualified for Energy Savings Certificates under the NSW Energy Savings Scheme which reduced project costs by $156,000.

The upgrades have vastly improved the quality of the tenancy and reduced heat load and maintenance costs. The works lead to a reduction of 550 tonnes of greenhouse gas emissions per annum.

This project was financed through an EUA involving Eureka EUF, Parramatta City Council, NAB and the CEFC.

In Parramatta a significant number of buildings are over 20 years old, given that these types of upgrades make properties cheaper to run and more attractive to tenants and potential purchasers it is likely that further EUAs will be signed in Parramatta.