The Clean Energy Finance Corporation (CEFC) will invest in the healthcare sector with an $80 million equity stake in the Barwon Institutional Healthcare Property Fund.
The investment will improve the energy performance of existing assets to achieve carbon emissions reductions of about 40 per cent when compared with the Council of Australian Governments (COAG) Baseline Energy Consumption in commercial buildings.
Measures include rooftop solar, energy efficient Heating Ventilation and Air Conditioning (HVAC) systems, lighting upgrades and building monitoring systems.
Barwon Investment Partners, which manages the Barwon Institutional Healthcare Property Fund, will also develop and implement a strategic plan to bring it towards net zero carbon emissions by 2030.
The Barwon portfolio covers sites in Victoria, NSW, Queensland, ACT and WA, with a presence in regional Australia in Mackay and Gosford. It ranges from private hospitals to oncology services, pathology laboratories and mental health facilities.
CEFC CEO, Ian Learmonth, said that the Barwon portfolio upgrades would demonstrate how the healthcare sector could cut energy bills and make dramatic inroads into carbon emissions output using technology that’s readily available.
“The healthcare sector is energy intensive, given its spatial footprint and typical 24-hour operating conditions. Improving the energy performance of these properties – whether they’re hospitals, medical centres or pathology labs – is one way this sector can drive down its overall emissions output.
“As we’ve seen in the broader property sector, tenants are demanding buildings with higher sustainability ratings because they aren’t as energy hungry and are often more comfortable to work in.
“A high performing building, with systems tuned to maximise energy efficiency, is a win for building owners, tenants and patients through reduced energy consumption, improved comfort and lower maintenance costs.”
The CEFC’s equity is part of a broader $375 million capital raising which involves several large Australian superannuation funds.
Tom Patrick, Partner with Barwon Investments Partners, said that partnering with the CEFC had given them the opportunity to play a leadership role in reducing energy emissions in the healthcare sector.
“It will enable us to introduce energy emission reduction measures in sites across Australia, and show the rest of the sector how to combat the energy-intensive nature of healthcare real estate.”
Somerset Specialist Centre in Penrith, NSW is already under construction and due to be completed in late 2019. The four-storey facility will include radiation oncology and is expected to achieve a four and a half-star NABERS energy rating equivalent.
The Deakin Clinic in Canberra is a 50-bed psychiatric facility that will fill a much-needed gap in mental health services in the ACT.
CEFC Property Sector lead, Chris Wade, said that the diverse nature of the portfolio meant that there would not be a one-size-fits-all approach, but an individual assessment of assets to determine the right combination of clean energy improvements to deliver the best outcomes.
“We’re particularly pleased to be investing in this portfolio of assets which complements our earlier investment in the healthcare sector through Dexus’ Healthcare Wholesale Property Fund.
“Together these two initiatives will help demonstrate the ongoing improvements investing in clean energy technologies can have for the sector across a range of large and smaller healthcare facilities.
“Lessons learned through our investment in the Barwon portfolio will be relevant for the health sector, but also for commercial property owners with similar quality assets seeking insights into the ability of clean energy technologies to enhance their longevity and market appeal.”
Based on targeted outcomes, the improvements to the portfolio are expected to deliver reductions of just under 6,000 tonnes of carbon emissions annually or just over 100,000 tonnes of abatement over the expected lifetime of the equipment. That’s the equivalent of removing around 1270 passenger vehicles from the roads each year or the electricity use of about 1000 homes each year.