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has also published results from monitoring the performance of recently awarded Green Star buildings that confirm the above assertions that real savings can be made by creating a sustainable workplace. Studies were carried out at a number of buildings, but the recently refurbished and 5 Star Green Star awarded 500 Collins Street Melbourne has shown a 9% increase in typing speeds of secretaries and a 7% increase in lawyers’ billing ratios, despite a 12% reduction in the average monthly hours worked. Additionally, sick leave has reduced by 39% and associated costs fell by 44%. Australia’s first 6 Star Green Star – Office


Design rated building, Melbourne City Council’s CH2, saw an increase in staff productivity of 10.9%, equating to an annual saving to the council and ratepayers of approximately $2 million. The above examples of post-occupancy


studies demonstrate that there is a significant financial benefit to a business if it invests in its human capital by creating sustainable workplaces. Of course, a side benefit to the creation of a sustainable workplace is the reduction in the consumption of energy, causing less carbon emissions anyway. This helps to future-proof the building in terms of its utility bills against anticipated significant rises in energy and water costs. Innovation in business management


that engages the staff and creates a healthier work environment by utilising sustainable products and practices will lead to a more productive and profitable business. Not only will the company become an employer of choice, but its branding in the marketplace will see it as a responsible corporate citizen. Targeted capital investment in appropriate technologies that can be monitored, measured and managed will create a sustainable workplace and assist in developing new business models that take a long term view rather than an expedient short term outlook. In essence, adopting sustainability


makes sound business sense. Already, business leaders and companies at the forefront of change are recognising that sustainable innovation in their businesses is delivering real benefits and providing a competitive advantage. The active uptake


of programmes such as ACT ON CO2 and the 10:10 scheme by major brands in the market place demonstrate that sustainability through innovation is the way forward. It is also through investment in human capital that major changes are occurring – the innovative employer will seek to engage employees to help develop a sustainable workplace and, consequently, a sustainable business for the future. Web: www.ndy.com


Healthcare outperforms commercial property in 2009


Surgeons in central London, Ian Cullen, co-founding director of IPD explained to delegates: “The 5.4% annual return represents the third consecutive year in which the healthcare property has proved robust against the worst financial crisis and synchronized global recession we have ever seen. “These have been the most testing times for any


T


branch of real estate investment and the margin of outperformance compared to the broader commercial market has been significant in each of the three years.”


Within the two-tier healthcare market, the


strongest performance was delivered by the primary sector – comprised of doctors’ surgeries, dentists and polyclinics – at 8.8%. The secondary sector, which consists of hospitals, long-term care facilities, nursing homes and specialist treatment centres, returned 2.2%. Cullen added: “In the healthcare market, the


robustness of rents, a long-term driver of performance, defended the sector and contributed to delivering the difference between the mainstream commercial assets and healthcare properties.” The seminar was chaired by Jeremy Tasker, head of


healthcare at Colliers CRE, who are also index sponsors. Opening the session, Tasker told delegates: “The weight of equity which is looking to come into this sector is immense. We are very proud to sponsor the IPD UK Healthcare Index as we believe it plays a vital part in conveying to healthcare property newcomers, and those professionals already in the market, the emergence of the sector from alternatives and towards the mainstream market.” Ahead of the index results, in a presentation which


covered the economic context as well as a commercial and healthcare property market overview, Walter Boettcher, director of research and forecasting, Colliers CRE, said: “There was dramatic yield compression from the middle of last decade to the crunch of mid 2007, which brought the sector in line with the broader market, produced huge capital


he healthcare property market has outperformed the broader UK commercial market for the third consecutive year, at 5.4% in 2009, according to the IPD UK Annual Healthcare Index. At the launch of the index results at the Royal College of


growth and some extraordinary returns in healthcare. “One of the drivers of that was competition for


stock in the core sectors was so intense that investors starting looking at alternative sectors like healthcare. Going forwards, now that healthcare has come in line with the core sectors, the yield patterns will probably track other sectors more closely.” The primary healthcare sector was the focus of the


next presentation. Bruce Walker, CEO at AH Medical Properties, told delegates the central concern for the healthcare property market is government’s position on funding new primary schemes. Walker explained: “The broader demographic profile and demand is undisputed, how that is delivered through government funding is a bigger question. In the medium-term the government is likely to continue its investment in primary care. “There is no threat to our existing lease structures,


there is no prospect of any renegotiation of GP rent reimbursement contract or closing down surgeries to save on rent. The risk really is about new procurement and new capital coming into the sector; how much new product is there coming through.” Andrew Hues, director at Aitchison Raffety, who is also sponsor the index, pointed to further consolidation within the overall healthcare market, revealing to delegates: “If there is further strengthening of yields we anticipate three portfolios could come onto the market, which could generate


from investors outside the specialist investor sector given their attractive size.” Concluding the seminar, chairman Jeremy Tasker


urged delegates: “We need more stock in the marketplace, we need more transactions so we can understand better how investors are thinking. The healthcare property sector is about non discretionary spending and is largely immune to economic cycles – therefore a relatively safe investment class but we do need more transactions.” The key contributors to the IPD UK Annual


Healthcare Index were MedicX Fund; Primary Health Properties; Assura Group; Ashley House and Aviva Quercus, while a further 17 portfolios within IPD’s existing Databank with healthcare properties were also included. The index is comprised of 571 healthcare properties worth £1.8bn. Web: www.ipd.com


www.pm-select.co.uk l july/august 2010 l Property Management Select l 55


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