Commercial buildings contribute significantly to Australia’s greenhouse gas emissions and represent a significant portion of the low cost abatement and energy efficiency opportunities in Australia. 

To support building upgrades to improve energy efficiency, in 2012 Sustainability Victoria published ‘The Next Wave: Retrofitting Victoria’s Office Buildings’. The report analysed the mid-tier office market, comprising buildings of PCA grade B, C and D. Subsequently, sustainability  in the mid-tier office market has been a growing focus for industry and government, with various commercial building programs targeting the mid-tier market.

The previous Next Wave report provided an important evidence base for identifying where the greatest opportunities for GHG emissions reduction were in the mid-tier office sector. Since then, gains made in reducing office building emissions have proven the effectiveness of retrofitting mid-tier buildings. Sustainability Victoria’s Energy Efficient Office Buildings Program showed that average benefits from building tuning and energy efficiency measures included energy savings of up to 29%, an improvement of 1 Star NABERS Energy rating and less than three-year payback on efficiency investment. There remain significant upgrade opportunities for mid-tier commercial offices, as well as broader opportunities across small and medium commercial buildings (SMCB) within and beyond the office sector.

This paper builds upon the original ‘The Next Wave’ 2012 report. It provides an overview of the Victorian commercial buildings sector and has been expanded to take into account changes in mandatory reporting thresholds for office buildings. It also includes an additional four commercial sectors. 

The report considers recent changes in the Commercial Building Disclosure (CBD)mandatory disclosure threshold of 1,000m2 NLA, down from the previous 2,000m2 threshold. The  disclosure requirement relates to the requirement to provide energy efficiency information when a commercial office is offered for sale or lease. 

This update has been expanded to include four other commercial sectors being: retail, healthcare, accommodation and hospitality. The lessons and practices established through retrofitting office buildings (and for the residential sector) can then be expanded into other commercial sectors that make up a large proportion of Victoria’s building stock, targeted to where the greatest emissions reduction and energy and water savings are possible. 

The research will assist to address gaps in the market and in decision-making about how to effectively transition the commercial sector in Victoria to carbon neutrality. 

The report is structured according to the five commercial sectors investigated, as trends and areas for upgrade tend to be sector specific. Each section identifies the GFA and number of buildings, their spatial distribution, age, ownership and tenancy, market trends and discussion of the drivers and barriers to upgrading, making recommendations for where upgrading should be targeted to support improved environmental performance.