Allianz conducts deep-dive Asia property-emissions audit

Allianz Real Estate is over halfway through a deep-dive energy audit on its Asia direct investments, with a review of its directly owned office assets now complete.

Suat Ghee Ong,

Allianz Real Estate

Suat Ghee Ong, head of asset management in Asia at Allianz Real Estate in Singapore, who manages its decarbonisation project in Asia, told AsianInvestor that the audit has been completed for all four office buildings that Allianz owns directly in Asia. The review is being carried out by an external company, which has been measuring the emissions generated by each building.

Offices takes up 53% of Allianz direct investments in Asia by exposure and 34% by net leasable area. They are likely to account for more than that 53% of total emissions, given that office buildings in general produce higher emissions than residential or logistics buildings.

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The review is still underway for another six assets – one office, owned jointly, and five logistics assets Allianz owns directly. It is about to begin for the 136 multi-family buildings the company owns in Asia, all of which are in Japan. Ong said the external company it hired took between six and eight weeks to provide an audit for each building.

“This is a level-two energy audit using external consultants,” she said, referring to the standards defined by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. The report will include a breakdown of energy use within a building and propose reduction measures and the cost of implementing them.

“[The audit] will tell me what is my energy use and emissions, then dissect into understandable beats and tell me what I need to do to [achieve] our global benchmark 1.5-degree pathway and the capex required for this over the next five to ten years,” she said, referring to the 2015 Paris Agreement target to limit global temperature increases to 1.5 degrees above pre-industrial levels.

Separately, Allianz is conducting a global audit on its emissions footprint, using emissions data from 2021. “What I’m running [in Asia] is a much deeper energy audit,” said Ong.

In keeping with its global strategy, Allianz has pledged to reduce emissions in its Asian portfolio by 25%, from 2021 levels, by 2025. By 2050, the firm’s target is for complete decarbonisation of its global portfolio.

MANAGING OFFICE POWER USAGE

In office buildings, Allianz efforts have focused on reducing demand for power via “smart” building management systems under its Building Signature Program, Ong said.

One example was to identify pockets of unusually high temperature that accumulate in buildings as a result of mechanical or engineering factors rather than occupant use, and to reduce these. The audit process helped identify gaps between current building power use and Allianz own sustainability standards, which define a desired “signature” for each building. It also identified the capex required for the improvements to close the gap.

Allianz is currently testing a smart management system on a building in Singapore, “It will take another year of testing,” she said, adding the company hoped to roll it out across other office buildings in Singapore and China once testing is complete.

Ong said that energy-saving measures had already had an impact on its office portfolio. She pointed to sensors in common areas, which reduce lighting when no one is there, as well as experimentation with increasing temperatures to reduce energy used by cooling systems. However, she said that efforts to measure these are at an early stage and that Allianz was as yet unable to disclose the impact on energy use.

Ong said that green leases were also helping to reduce emissions across office and multi-family buildings.

LOGISTICS AUDIT IN PROGRESS

A level-two energy audit in Asia was underway on five of the fund’s 13 directly invested logistics assets, according to Ong, which are all in China and Australia and which use less energy than urban offices of comparable size.

Ong said that despite the appeal of cold chain logistics – related to the transport of temperature-sensitive goods – from an investment point of view, the company had not yet invested in this sector in Asia because of its high power requirements.

“The main consideration is the impact [of power consumption] on the climate,” she said, adding that Allianz had begun an internal project to measure the precise energy requirements of cold storage facilities to see whether it was an asset class it would invest in in the future.