environmental performance monitoring/media/files/l/london...act to reduce energy consumption by 80%...

Environmental Performance Monitoring Reporting Period: April - September 2016

Report date 2nd December 2016

1

Executive Summary

This environmental performance monitoring report presents analysis for LondonMetric over the period October 2014 to

September 2016 and covers all assets under management. This report is designed to provide an overview of

LondonMetric’s environmental performance in the following ways:

• Understand your energy, water and waste performance down to a property level over the last six months.

• Highlight long term trends in energy, water and waste performance for each property on a like-for-like basis.

• Enable LondonMetric to identify where potential improvement initiatives would be most effective.

Performance at a glance

Energy

Consumption

Energy

Cost*

6% 5%

£4K £17K

Quarterly like-for-like change in

energy

Yearly like-for-like change in

energy

Quarterly like-for-like change

in cost

Yearly like-for-like change in

cost

24%

Yearly absolute change in

energy

£134K Yearly absolute change in

cost**

Water

Consumption

Waste

Generated

3% 16%

100% 53%

Quarterly like-for-like change in

water

Yearly like-for-like change in water Percentage of waste diverted

from Landfill

Annual recycling rate***

NOTES:

Quarterly like-for-like = the same assets looked at for the period July to September 2016 versus July to September 2015

Yearly like-for-like = the same assets looked at for the period October 2015 to September 2016 versus October 2014 to September 2015

*Energy cost has been estimated using a cost per unit calculation and does not represent actual change in costs, Electricity = £0.10 per kWh

Gas = £0.035 per kWh

**The absolute change in costs relates to changes in electricity and gas usage, it does not include changes in CRC liability costs.

***The recycling rate includes all waste sent to recycling facilities, off-site material recovery facilities and for compost.

2

Performance at a glance - analysis

Energy

Quarterly like-for-like energy consumption over the period July to September 2016 compared to July to September

2015 has decreased by 6%, and yearly like-for-like consumption has decreased by 5%. This is largely due to a

decrease in energy consumption at the office asset Marlow International which accounts for 89% of this year’s

consumption.

Marlow International is the only remaining office property in the investment portfolio. The asset accounts for the

majority of the portfolio’s consumption in the yearly like-for-like analysis. Marlow International has experienced a

reduction in energy consumption of 7% on a quarterly basis and of 6% on an annual basis.

There have, however, been increases in consumption for a number of properties on both a quarterly and annual basis.

Most notable, is the significant increase in energy consumption at Martlesham Heath of 115%, and at Launceston

Retail Park of 96%, on yearly like-for-like basis. Both assets have had new supplies installed over the last 12 months.

We have investigated new supplies and understand that the new supply installed at Launceston on 28th August 2015 is

for a “We Buy Any Car” unit. However, we haven’t been able to obtain a response from Savills regarding Martlesham

Heath, and are still chasing for an explanation.

Water

Marlow International is the only property for which water data is available for the full 24-month reporting period. Water

consumption at Marlow International has reduced by 16% on an annual basis. However, consumption for July to

September 2016 is 3% higher than that for July to September 2015. This could be due to the fact that the consumption

between July and September 2015 was based on estimated readings rather than actual, or it could be as development

works are taking place on the third floor in preparation for a new tenant.

Waste Waste data is available for the full 24-month reporting period and shows a 100% diversion from landfill rate for the 2015/16 period. The recycling rate for the same period was 53%, which includes all waste sent to recycling facilities, off-site material recovery facilities and for compost. Waste movements under LondonMetric’s control are limited to Marlow International.

3

Target Review

Below are LondonMetric’s carbon and energy reduction targets. These were set from 1st April 2016 to be met by 31st March 2017 against a baseline of 2015/16 financial year. The targets have been set in line with the UK’s Climate Change Act to reduce energy consumption by 80% by 2050.

As LondonMetric holds two distinct types of assets in its portfolio (Office and Retail Park) the carbon and energy

reduction targets have first been split accordingly, and then aggregated to create house level reduction targets which

also include the residential assets held within the investment portfolio.

Asset Type Energy Reduction Target

(kWh)

Carbon Reduction Target

(tCO2)

Office 4%* 4%*

Retail Park 5% 5%

House level 4% 4%

*Energy and carbon reduction targets for office assets are normalised by occupancy rate to account for variances in consumption

due to vacancy at Marlow International.

LondonMetric have also set water reduction and waste recycling targets. The water reduction target of 4% was set from

1st April 2016 to be met by 31st March 2017 against a baseline of 2015/16 financial year. The waste recycling rate of

25% was set to be achieved by 2020 against at 2015/16 baseline.

Asset Type Water Reduction Target

(m³)

Recycling rate

(%)

House level 4% 25%*

*To be achieved by 2020

4

Energy – Are we on track?

Progress against LondonMetric’s energy targets is shown below. The split between electricity and gas performance at

house level is shown in Figure 2. The split between asset type is shown in Figures 3 and 4.

Energy Reduction Progress

House level Annual Target: 4%

Comparing: April 2015 - March 2016 to April 2016 - March 2017

Year to date progress: 5%

Comparing: October 2014 - September 2015 to October 2015 - September 2016

What have we saved? What have we used?

366,492 kWh

6,477,370 kWh

Like-for-like energy savings 295 t CO2e

2,478 t CO2e Like-for-like energy consumption

£16,948*

*excludes CRC

costs

£524,180

Figure 2: Absolute energy consumption per quarter for the entire LondonMetric portfolio

0

500

1,000

1,500

2,000

2,500

Oct - Dec Jan - Mar Apr - Jun Jul - Sep Oct - Dec Jan - Mar Apr - Jun Jul - Sep

2014 2015 2016

Con

sum

ptio

n (M

Wh)

Natural Gas Electricity

5

Figure 3: Absolute energy consumption per quarter split by asset type

Figure 3 shows that the Office assets in the portfolio in the last year account for 89% of energy use (in absolute terms) for the entire portfolio. The only office asset with a full 24-months of consumption is Marlow International. Marlow International’s annual energy consumption decreased by 6%, however as we were unable to obtain the vacancy rate we could not calculate the progress against the office energy reduction target.

In contrast, Retail Park assets account for 10% of the portfolio’s energy use between October 2015 and September 2016. The seasonal variation in consumption is likely to be due to increased heating and lighting requirements over the winter months.

A more detailed view of the Retail Park assets’ absolute consumption over time can be seen in Figure 4 below.

Figure 4: Absolute energy consumption for Retail Park property type per quarter.

The energy reduction target for Retail Parks is 5%, however the annual energy consumption at Retail Park assets has increased by 10%, largely due to new energy supplies at Trostre South, Launceston, Martlesham Heath, Christchurch and Seager. The new supplies at Trostre South, Launceston, Christchurch and Seager are for ‘We Buy Any Car’ units and are LondonMetric’s responsibility so are included in the target performance. Therefore, we recommend implementing energy reduction activities at your largest consuming assets, Damolly, Airport and Trostre South.

0

20

40

60

80

100

120

140


2014 2015 2016

Con

sum

ptio

n (M

Wh)

Retail (or Leisure) Park

0

500

1,000

1,500

2,000

2,500


2014 2015 2016

Con

sum

ptio

n (M

Wh)

Residential Retail (or Leisure) Park Office

6

Table 1 below shows the yearly like-for-like analysis for all individual properties in LondonMetric’s

investment portfolio, as well as their headquarters (One Curzon Street), with their associated changes in

electricity and gas consumption over the period October 2015 to September 2016 compared to October

2014 to September 2015, alongside the overall total energy change.

Property Asset

Type

Total Energy

Consumption

(kWh)

Total Carbon

Change

Total Energy

Change

Electricity

Change

Gas

Change

Airport Retail Park RP 67,269 -10% -1% -1% No Gas

Alban Retail Park RP 32,406 10% 22% 22% No Gas

Christchurch Retail Park RP 24,149 -14% -6% -6% No Gas

Damolly Retail Park RP 75,933 -11% -9% -9% No Gas

Dartford Heath Retail Park

RP 16,358

1% 11%

11% No Gas

Dunstable Retail Park RP 31,789 1% 11% 11% No Gas

Kings Lynn, Pierpoint Retail Park

RP 28,486

-9% -1%

-1% No Gas

Launceston Retail Park RP 25,409 79% 96% 96% No Gas

Madford Retail Park RP 6,566 2% 1% 1% No Gas

Marlow International Office 3,712,857 -12% -6% -2% -12%

Martlesham Heath RP 14,886 92% 115% 115% No Gas

Moore House Residential 55,840 -8% -3% -3% -3%

Seager Retail Park RP 28,818 2% 12% 12% No Gas

Trostre South Retail Park RP 49,083 21% 34% 34% No Gas

Table 1: LondonMetric properties in the like-for-like analysis and associated energy changes during the period October 2015 - September 2016

compared to October 2014 - September 2015.

Note: For a list of assets not included in the ‘like-for-like’ analysis but still contributing to the absolute totals, see Appendix 2.

7

Energy – CRC costs

LondonMetric is a participant in Phase 2 of the CRC Energy Efficiency Scheme. Year 3 of the scheme spans 1st April

2016 to 31st March 2017. At this stage in the year, the forecast carbon allowance fees stand at £43,332 as shown in

Figure 5.

Figure 5: CRC allowance costs for 2016/17 compared to forecast cost for 2015/16

Where are we heading?

Your CRC liability is expected to decrease by 9% compared to the previous year’s cost.

The price per tonne has risen from £16.90 to £17.20 for this CRC year. For a breakdown of predicted allowance cost

per property, see Appendix 3.

CRC costs in perspective What’s coming up for CRC

CRC allowance costs are expected to make up

7%

of LondonMetric’s total annual energy costs.

Forecast Allowances Sale for Phase 2 Year 3

1st – 29th April 2017

£43,332

£39,512

£0

£5,000

£10,000

£15,000

£20,000

£25,000

£30,000

£35,000

£40,000

£45,000

£50,000

Apr-16 Jul-16 Oct-16 Jan-17 Apr-17

Yr3 (current year) Yr2 (previous year) Yr3 (estimated)

8

Estimated energy data

Save

£10 by obtaining accurate data

Estimated energy data

The CRC Scheme applies an uplift of 10% to all ‘estimated’ emissions, thus Allowance costs rise where substantial

amounts of estimated meter reads are used. The issue can be avoided through taking regular meter readings through

the year or installing automatic metering (AMR meters). However, in LondonMetric’s case, given the small savings

available, no AMR upgrade is recommended unless this is a cost-free option. There are two meters with estimated

consumption, one at Trostre South Retail Park, and the other at Christchurch Retail Park.

Figure 6: CRC timetable during 2016/17

99%

1%

CRC Actual data CRC Estmated data

9

Water – Are we on track?

Water reduction progress

Decrease in water consumption: 16%

Comparing: October 2014 - September 2015 to

October 2015 - September 2016

What have we used?

5,395 m3 Absolute water consumption

Marlow International is the only asset within the investment portfolio with water consumption. Usage remained relatively

stable between April 2015 and September 2015, with a decrease in consumption between October 2015 and March

2016. The usage then increased and remained relatively stable and comparable to historic records between April and

September 2016.

As a reduction of 16% has been achieved between October 2015 and September 2016 in comparison to October 2014

and September 2015, LondonMetric are on track to meet the 4% water reduction target by March 2017.

Figure 8: Water usage for the portfolio split by quarter

0

200

400

600

800

1000

1200

1400

1600

1800


2014 2015 2016

Wate

r C

onsum

ption (

m³)

Water

10

Waste – Are we on track?

It is best practice to avoid all waste to landfill. LondonMetric therefore set a target to ensure all waste from their investment portfolio avoids landfill. A long-term target to achieve a 25% recycling rate by 2020 was also set. As Marlow International is the only managed asset with waste, it is the only asset in this analysis. The recycling rate at Marlow International between October 2015 and September 2016 was 53%, including all waste sent to recycling facilities, off-site material recovery facilities and for compost, so LondonMetric are on track to meet this target.

Waste Reduction Progress

100% diversion from landfill

October 2015 – September 2016

What have we sent to landfill What have we recycled?

0 tonnes

21 tonnes

£6,986 savings on landfill tax

Figure 8: Waste totals for the portfolio split by waste stream

0

5

10

15

20

25

30

Oct-Dec Apr-Jun Jan-Mar Jul-Sep Oct-Dec Apr-Jun Jan-Mar Jul-Sep

2014 2015 2016

Tonnes o

f w

aste

Recycling Facility Off-site Materials Recovery Facility

Incineration (with energy recovery) Facility Composting/Anaerobic Digestion Facility

11

One Curzon Street HQ

Although LondonMetric have not set environmental performance targets for their HQ, it is important to monitor and

measure the energy and water consumption, carbon emissions, and waste recycling at this asset for reporting purposes.

Energy Reduction Progress


Comparing: October 2014 - September 2015 to October 2015 – September 2016


-2,104 kWh

196,263 kWh

Like-for-like energy savings 7 t CO2e

66 t CO2e Like-for-like energy consumption

£335*

*excludes CRC

costs

£14,461

Water Reduction Progress


Comparing: October 2014 - September 2015 to October 2015 – September 2016


Like-for-like water savings 85 m³

632 m³

Like-for-like water consumption

We have been unable to retrieve the waste data from One Curzon Street and will continue to follow up the request for data with GVA.

12

Appendices

Appendix 1- Data Quality notes

A number of assets have been held during the two year reporting period that were sold or acquired part the way through the year. They have been excluded from all like-for-like analysis, but have been included in the CRC cost forecast for 2016/17.

3% of energy data has been estimated between October 2015 and September 2016. Estimated data is only at Trostre South Retail Park and Christchurch Retail Park.

No water data has been estimated between October 2015 and September 2016.

13

Appendix 2 - List of assets analysed in this report

Asset Sector Included in the ‘like- for-like’ analysis?

Asset sale date

Asset purchase date

Airport Retail Park Retail Park yes - 24/09/2010

Alban Retail Park Retail Park yes - 26/11/2010

Cannon Lane Retail Park no - void consumption only

- 20/02/2013

Christchurch Retail Park Retail Park yes - 20/02/2013

Cleveland Gate Retail Park Retail Park no - 03/12/2014

Damolly Retail Park Retail Park yes - 07/07/2010

Dartford Heath Retail Park Retail Park yes - 13/10/2013

Dunelm and Wickes Retail Park no - 14/01/2015

Dunstable Retail Park Retail Park yes 22/09/2015 20/02/2013

Kings Lynn, Pierpoint Retail Park Retail Park yes - 14/09/2011

Kirkstall Bridge Shopping Park Retail Park no – no energy data until 22nd September 2015

- 18/01/2011

Launceston Retail Park Retail Park yes - 04/08/2010

Lichfield Retail Park Retail Park no 11/05/2015 31/10/2012

Longwell Green Retail Park no 14/12/2015 02/03/2012

Madford Retail Park Retail Park yes - 25/09/2013

Marlow International Office yes - 27/07/2012

Martlesham Heath Retail Park yes - 14/05/2013

Moore House Residential yes - 17/11/2013

Mountbatten Retail Park Retail Park no 12/08/2015 08/09/2013

North Shields Retail Park Retail Park no - 13/02/2015

One Curzon Street HQ Corporate Office separate analysis - 01/01/2013

Seager Retail Park Retail Park yes - 07/08/2013

The Bubbleland Retail Park Retail Park no - 14/12/2014

Totton Retail Park Retail Park no - 06/12/2014

Trostre South Retail Park Retail Park yes - 03/07/2014

Watling Street Retail Park no 11/10/2015 06/02/2012

Westcroft Retail Park Retail Park no 15/11/2015 07/08/2013

Note: All assets are included here, though some only contribute to part of the analysis period due to their disposal from the portfolio.

14

Appendix 3 – CRC costs per property

Asset Name Predicted CRC Cost for

2016/17 % of Total CRC

Allowance Costs

2015/16 (Oct - Sep) Emissions

(t CO₂)

2016/17 (Oct - Sep)

Predicted Emissions

(t CO₂)

% Predicted Emission Change

Marlow International £35,987 90% 1116 992 -11%

Damolly Retail Park £583 1% 14 12 -18%

Airport Retail Park £517 1% 14 10 -26%

Alban Retail Park £249 <1% 6 8 30%

North Shields Retail Park £246 <1% 7 7 12%

Dunstable Retail Park £244 <1% 8 7 -10%

Kings Lynn, Pierpoint Retail Park £221 <1% 5 5 -10%

Seager Retail Park £221 <1% 5 6 4%

Kirkstall Bridge Shopping Park £201 <1% 0.3 4 1078%

Dunelm and Wickes £197 <1% 3 7 97%

Launceston Retail Park £195 <1% 3 4 46%

Christchurch Retail park £186 <1% 6 4 -34%

Dartford Heath Retail Park £126 <1% 4 3 -14%

Martlesham Heath £115 <1% 1 4 384%

Trostre South Retail Park £108 <1% 0.3 5 1640%

The Bubbleland Retail Park £94 <1% 1 1 -2%

Totton Retail Park £72 <1% 2 1 -51%

Westcroft Retail Park £68 <1% 9 0.0 -100%

Havens Head Retail Park £64 <1% 11 0.0 -100%

15

Asset Name Predicted CRC Cost for

2016/17 % of Total CRC

Allowance Costs

2015/16 (Oct - Sep) Emissions

(t CO₂)

2016/17 (Oct - Sep)

Predicted Emissions

(t CO₂)

% Predicted Emission Change

Madford Retail Park £50 <1% 1 1 1%

Cannon Lane, Tonbridge £32 <1% 0.0 2 N/A

Cleveland Gate Retail Park £6 <1% 0.2 0.1 -29%

Longwell Green £6 <1% 1 0.0 100%

Watling Street £1 <1% 1 0.0 100%

Note: Only assets contributing to CRC costs for Phase 2, Year 3 (April 16 to March 17) have been included here.

JLL – Upstream Sustainability Services

Beth Ambrose

Local Director

30 Warwick St, London, W1B 5NH

+44 (0)20 7399 5709

[email protected]

Pauline Martin

Consultant


+44 (0)20 7087 5869

[email protected]

Zara Williams

Analyst


+44 (0)203 147 1526

[email protected]

www.jll.com

Jones Lang LaSalle

© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones

Lang LaSalle and shall be used solely for the purposes of evaluating this proposal. All such documentation and information

remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is

authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written

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representation or warranty is made as to the accuracy thereof.

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