PMG Fanshawe Case Study

CASE STUDY 152 Fanshawe Street, Auckland

152 FANSHAWE STREET CASE STUDY

152 Fanshawe Street, Auckland In 2021, PMG’s Direct Office Fund acquired 152 Fanshawe Street with the goal of transforming it into a more energy-efficient building, aiming to achieve a high NABERS rating.

This initiative was part of PMG’s broader strategy to enhance the operational efficiency and sustainability of its properties, aligning with contemporary environmental standards, tenant expectations and future regulations.

Upon acquisition, the building presented several challenges, including inaccurate metering of tenant and landlord utilities, uncontrolled HVAC systems, and outdated infrastructure.

Over the past three years, PMG has implemented several sustainability and value-add features and systems, which make environmental and financial sense to both tenants and investors, and within our business (as a fund manager).

152 FANSHAWE STREET CASE STUDY

Property highlights 152 Fanshawe Street is a premium office building located in the heart of Auckland’s bustling Central Business District. The property commands a high profile corner position on one of the busiest arterial routes leading into Auckland, and only five minutes’ walk from the waterfront.

Motorway on/off ramp to Auckland’s North Shore 350 meters

Auckland CBD Location

New Zealand international convention centre 850 meters

152 FANSHAWE STREET CASE STUDY

Challenges Inaccurate metering: The separation of tenancy and landlord metering was not accurate, making it difficult to measure the base building load effectively.

Low occupancy: Due to COVID-19, occupancy numbers were too low to conduct a full building operational energy rating.

Uncontrolled HVAC: The HVAC system was not synced with tenant hours, leading to unnecessary energy consumption.

Outdated after-hour controls: The existing after-hour call buttons would keep the plant running overnight when initiated, causing excessive energy use.

Inefficient fresh air system: The fresh air ventilation system relied on electric heater banks, which consumed a significant amount of power.

Energy-intensive lighting: Fluorescent lighting in common areas was inefficient and contributed to high energy usage.

Strategy 152 Fanshawe Street is managed by PMG Funds on behalf of the PMG Direct Office Fund.

The Fund’s strategy for the property is centered on improving energy efficiency and operational performance to achieve a high NABERS rating, thereby increasing the property’s attractiveness to high-value tenants, while meeting current tenants’ expectations and provide ongoing value for investors.

152 FANSHAWE STREET CASE STUDY

Results Enhancements were designed to reduce operational costs through energy efficiency measures, improve tenant comfort and satisfaction, leading to higher retention rates, attract premium tenants willing to pay a premium for environmentally friendly and efficient spaces, and provide a strong return on investment by leveraging energy savings and increased rental income.

The energy efficiency measures implemented have led to substantial operational and cost benefits, including an 11.8% reduction in energy usage in the 2023 calendar year compared to 2022.

The new fresh air handler unit has improved comfort levels for tenants, and the upgrades resulted in significant energy savings, with a notable reduction in energy consumption and associated costs.

Specifically, the building saw a reduction of 45,664 kWh in energy consumption, equating to a savings of $11,873.

11.8%

reduction in energy usage

$11,873

Saving from a 45,664kWh reduction

152 FANSHAWE STREET CASE STUDY

Value-add projects To overcome the initial challenges and improve the building’s energy efficiency, PMG implemented several key enhancements.

First, we appointed a consultant who conducted a thorough review of the equipment operation, revealing that indoor units were running without a schedule, particularly on weekends. Regular reviews of owner-tenant agreements ensured that HVAC systems were operational only when necessary.

The installation of a Building Management System (BMS) allowed for accurate recording and monitoring of tenant and landlord loads, which was crucial for NABERS readiness.

Additionally, a new package unit was installed for the fresh air ventilation system, providing tempered fresh air and reducing the load on the air conditioning plant, thus improving tenant comfort. The 7KNOX app was installed for after-hours air conditioning (AHAC), which enabled tenants to book air conditioning as needed, with costs on-charged to the requesting tenant. This restricted uncontrolled usage and saved administrative time.

Finally, common area lighting was upgraded to LEDs, significantly reducing the lighting load, and motion sensors were introduced in basement car parks and common areas to prevent uncontrolled power usage.

152 FANSHAWE STREET CASE STUDY

Award-winning fitout Maintaining a focus on sustainability and longevity, PMG partnered with innovative interior architecture firm Spaceworks, to design a carbonreduced fitout for a 345.36sqm section of the property’s first floor.

The fitout, which was designed using Spaceworks’ Toitū-audited carbon calculator, includes a welcome kitchen, a large boardroom, two smaller meeting rooms and efficient open plan workspace for up to 40 desks. ​The design won the Environmental category in the 2023 Construction Sector Accord Awards.

40%

reduction of embodied carbon compared to traditional New Zealand construction methods, the equivalent saving of driving 23,713km.

Conclusion 152 Fanshawe Street’s journey from initial acquisition by the PMG Direct Office Fund, to achieving a 5.5-star NABERS rating highlights the effectiveness of sustainability-focused enhancements and active management in delivering significant value to both tenants and investors.

pmgfunds.co.nz 0800 219 476