Property Developers Are Investing In Sustainability, According To Westpac NZ Data

Property developers are increasingly investing in sustainable buildings and initiatives, according to data from Westpac NZ on the environmental and social assets being financed through its Sustainable Business Loan.

Since its launch in June 2023, Westpac has provided more than $440m through the Sustainable Business Loan to support property projects that are either being built sustainably or are aimed at delivering positive environmental or community outcomes.

Reuben Tucker, Westpac NZ MD Institutional & Business Banking, says the bank is supporting investment in healthy and affordable social housing, as well as energy efficient homes and offices, and projects to increase climate resilience.

“We recently announced that we’re committing to lend at least $1bn over the next three years to social and affordable housing,” Mr Tucker says. “And doing our bit to power a lower emissions and resilient economy is incredibly important to us, so we’re also focused on financing initiatives that deliver better environmental outcomes.

“We introduced the Sustainable Business Loan to further incentivise investment in assets or projects that improve the environment, help businesses adapt to climate change or deliver positive social outcomes.

“We knew there was a demand for this kind of solution and the uptake from the property sector in particular has been fantastic.”

Businesses receive a discount on the loan interest margin if the building or other asset meets the Sustainable Business Loan criteria, and the customer can provide the necessary validation.

One of the customers who has used the Sustainable Business Loan to fund investment is Wellington’s Nightingale Group. The company recently built a 72-unit 6 Homestar-rated development in Wellington that’s now being leased to Wellington City Council to provide affordable rental units to those who qualify under the council’s Te Kāinga affordable rental programme.

Westpac provided a Sustainable Business Loan to support the long-term investment for the development, in recognition of the social and environmental outcomes delivered by the project. 

Nightingale Group MD Simon Nightingale says: “Building homes that are warm, dry and energy efficient is obviously the right thing to do, but it also makes good business sense. Properties built to a high environmental standard are more energy efficient and healthy for people to live in, making them ultimately more appealing to both tenants and landlords.

“We firmly believe that affordable housing should also be healthy housing. We’ve had a long relationship with Westpac and were really pleased that the bank recognised both the social and economic value of our project.”

Modus Community Housing is another early adopter of the Sustainable Business Loan.

Modus recently opened its latest development, a 36-unit complex on Jellicoe Road in Auckland’s Manurewa. The company has an additional two housing developments in Manurewa and Māngere. As a registered Community Housing Provider, Modus operates through the Community Housing Regulatory Authority, providing affordable rental accommodation to tenants.

Modus Managing Director David Nixon says it’s been great to be able to use a single Sustainable Business Loan to support all three of the company’s projects.

“We are very grateful for the partnering approach that Westpac has taken to help us refinance and grow our portfolio,” Mr Nixon says. “Tenants moved into the Jellicoe Road development just four days after opening and feedback on their new homes has already been really positive. There's a real need for more affordable and social housing in New Zealand and we’re keen to help solve this problem.

“We’re also focused on minimising environmental impacts and going forward are committing to delivering our housing projects to Homestar 7. We have another exciting development in this area which we look forward to announcing soon.”

In the green building space, property developer Mansons TCLM has just completed work on the 12-level, 30,000sq m 50 Albert St premises in downtown Auckland. The building will provide office space for around 3000 people, including a new headquarters for Spark, and will have a 6-Green Star Energy Efficiency certification. Westpac has provided a Sustainable Business Loan to the project.

Culum Manson, Commercial Director of Mansons TCLM, says building responsibly is hugely important to Mansons.

“We’ve delivered the highest numbers of Green Star office buildings in the country,” Mr Manson says. “Our most recent buildings are also Platinum WELL certified, as well as being 120% carbon positive. We're committed to creating energy-efficient, carbon positive workplaces that support the needs of people and the planet and are pleased that Westpac recognises the value in that.”

Reuben Tucker says supporting sustainable property development will continue to be a focus for Westpac.

“We have an opportunity to reimagine how we deliver healthy, affordable housing and environmentally friendly buildings to all New Zealanders. It’s a privilege to be working with the companies invested in this space.”   

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