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PRI reporting framework 2017

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Post-investment (monitoring and active ownership)


PR 11. ESG issues in post-investment activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

11.1. Indicate if your organisation, and/or property managers, considers ESG issues in post-investment activities relating to your property assets.

11.2. Indicate whether your organisation, and/or property managers, considers ESG issues in the following post-investment activities relating to your property assets.

11.3. Describe how your organisation, and/or property managers, considers ESG issues in post-investment activities related to your property assets.

Our fund specific sustainability strategies and Lendlease's Global Minimum Requirements for Health, Safety and the Environment ('GMRs') provide clear objectives, strategies, and targets for each asset. These tools are used to clearly articulate aspirations and expectations for stakeholders.

On a quarterly basis, sustainability reviews are undertaken and investors are updated on the overall performance of the funds' assets. The investor reports cover several aspects and include ESG issues and performance.

All major developments have a sustainability brief which aims to clearly articulate the sustainability requirements for projects. Minor development projects are governed by Lendlease's GMRs.

Occupier satisfaction surveys are typically undertaken annually, the results of which are used to inform asset strategy and improve occupier satisfaction. In some cases, occupier surveys are undertaken by a third party organisation to enable industry benchmarking.

Post-investment, the following commitments are made:

- Implementation of the following programs:

• Health and safety; • Environmental management; • Energy and water efficiency; • Waste management; • Indoor environment and air quality monitoring; and • Climate resilience and adaptation.

- Incorporating ESG matters into the following key property management documents:

• Building house rules; • Tenant fitout guidelines; and • Property management agreements.

- Effective tenant and community engagement including:

• Green lease clauses incorporated into leases; • Tenant amenities such as end of trip facilities; • Annual satisfaction surveys; and • Sustainability guides, reporting and information sharing.

- Responsible supply chain engagement.

- Investigation and implementation of innovative solutions.

- Risk management and governance practices

Property monitoring and management

PR 12. Proportion of assets with ESG targets that were set and monitored

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate the proportion of property assets for which your organisation, and/or property managers, set and monitored ESG targets (KPIs or similar) during the reporting year.

(in terms of number of property assets)

12.2. Indicate which ESG targets your organisation and/or property managers typically set and monitor

Progress Achieved
          base building/common area electricity consumption intensity
          Whole building water consumption intensity
          Primary recycling rate
          -11.7% (73.01 kWh at end 2016 vs. 82.64 kWh in FY14 baseline).
          0% (0.758 KL at end 2016 vs 0.758 KL in FY14 baseline).
          -0.6% (65.3% at end 2016 vs. 64.7% in FY14 baseline).
Progress Achieved
          Tenant satisfaction surveys issued
          Tenant satisfaction survey response rate
          Number of community engagement activities
          Surveys are issued to most tenants.
          We believe the response rate is in the order of 30-50%.
          Extensive community engagement across retail and commercial assets.
Progress Achieved
          Green leases executed in 2016 (percentage of leasing activity)
          Asset and portfolio level certification targets (GRESB, Green Mark, Green Star, GBI, NABERS, LEED, BREEAM)
          Assets with a Climate resilience and adaptation assessment completed
          Most tenants
          - GRESB target (Australia core funds, top 5)
- NABERS office (5.1 Star Energy, 4.7 Star Water)
- NABERS retail (4.5 Star Energy, 4 Star_Water).
          30 assets (all Australia retail, office).

12.3. Additional information. [Optional]

PR 13. Certification schemes, ratings and benchmarks

13.1. Indicate whether your property assets are assessed against certification schemes, ratings and/or benchmarks

13.2. List the certification schemes, ratings and/or benchmarks your property assets are assessed against and what proportion of your property assets they apply to.

          NABERS Energy and Water
Proportion of property assets these apply to

(in terms of number of property assets)

          Green Star (Design & AsBuilt, Performance)
Proportion of property assets these apply to

(in terms of number of property assets)

          Green Mark (Singapore) & GBI (Malaysia)
Proportion of property assets these apply to

(in terms of number of property assets)

13.3. Additional information.

Tower 1, International Towers Sydney at Lendlease's Barangaroo South development achieved 6 star Green Star certification during the reporting period, and a significant number of NABERS Energy and Water ratings were undertaken across the retail and office portfolios.

Green Star Performance which considers the sustainability operation of buildings were improved for the APPF Commercial Fund (portfolio average of 3 Star) whilst APPF Retail's Green Star Performance remained stable.

NABERS and Green Star certifications are undertaken annually.

Lendlease's focus on Green Mark in Singapore continued with Parkway Parade, 313@Somerset and JEM maintaining its Platinum certification. Setia City Mall in Malaysia maintained its Gold Green Mark certification.

In addition to the local rating schemes noted above, it is important to note that Lendlease's internally managed property funds participate in the Global Real Estate Sustainability Benchmark (GRESB) survey on an annual basis. In 2016, Lendlease's property funds achieved several GRESB global and regional leadership positions including Global developer assessment first (LLITST) and second (LLOITST) place developer assessment, Asia retail first (ARIF2) and second place (ARIF1), Australia retail first (LLSRF) and second (APPF Retail), Australia industrial first (APPF Industrial).

Property developments and major renovations

PR 14. Proportion of developments and refurbishments where ESG issues were considered

New selection options have been added to this indicator. Please review your prefilled responses carefully.

14.1. Indicate the proportion of active property developments and major renovations where ESG issues have been considered.

(by number of active property developments and refurbishments)

14.2. Indicate if the following ESG considerations are typically implemented and monitored in your property developments and major renovations.

14.3. Additional information. [Optional]

Compliance with Lendlease's Construction and Asset Global Minimum Requirements (GMR) for safety and environment is a requirement for all Lendlease projects.

Further, a sustainability brief is always developed for major developments, retrofits and refurbishments, prepared by a collective effort of internal and external specialists.

In line with Lendlease Investment Management's objective to develop high quality green buildings with efficient operating procedures, developments and major renovations are intended to improve ESG performance of that asset's applicable Fund. Further, developments and major renovations with these attributes are also complementary in supporting Lendlease Group's sustainability framework and aspirations (including those that address minimum standards for each of the twelve sustainability elements and best-in-class) and corporate target goals.

Occupier engagement

PR 15. Proportion of property occupiers that were engaged with

New selection options have been added to this indicator. Please review your prefilled responses carefully.

15.1. Indicate the proportion of property occupiers your organisation, and/or your property managers, engaged with on ESG issues during the reporting year.

(in terms of number of occupiers)

15.2. Indicate if the following practises and areas are typically part of your, and/or your property managers’, occupier engagements.

15.3. Additional information. [Optional]

Strong and consistent engagement with tenants provides the Lendlease's Investment Management business with insight into their evolving needs and demands. This allows the Lendlease to be proactive in meeting those changing requirements now and into the future. We believe that effective tenant engagement leads to tenant retention. 

All fitout guidelines issued to tenants prior to occupation include environmental and social sustainability requirements and recommendations.

Another key component of the tenant engagement strategy is the completion of an annual survey of existing tenants within the portfolio. The survey is used to understand the occupants view on sustainable initiatives. Results of the survey are collated and presented to the owners. Key issues are addressed in asset plans. Further tenant engagement regarding the survey results is undertaken when required.

Training on waste minimisation is typically provided to tenants, particularly where tenants generate a material quantity of waste. Through this process feedback is provided on waste recycling performance.

Additionally, feedback on energy and water performance is provided via tenant portals and/or asset websites.

PR 16. Proportion of green leases or MOUs referencing ESG issues

16.1. Indicate the proportion of all leases signed during the reporting year that used green leases or the proportion of Memoranda of Understandings (MoUs) with reference to ESG issues.

(in terms of number of leases or MoUs)

16.2. Additional information.

All standard leases issued by Lendlease Investment Management's commercial, retail and industrial funds include ESG aspects and requirements. Typically, the standard ESG clauses aim to:

  • Ensure that each party agrees that ESG matters are an important component of property management and occupation;
  • Set out each party's ESG targets, commitments and other requirements; and 
  • Identify information sharing and legislative requirements.

Whilst every effort is made to ensure that the green lease clauses are included in executed leases, there are occasions where the clauses may be diluted and, in some cases, deleted.

Community engagement

PR 17. Proportion of assets engaged with on community issues

17.1. Indicate in respect of what proportion of property assets your organisation, and/or your property managers, engaged with the community on ESG issues during the reporting year.

(in terms of number of property assets)

17.2. Indicate if the following areas and activities are typically part of your, and/or your property managers’, community engagement.

17.3. Additional information.

Lendlease has a commitment for 100% of Lendlease operations will have a Stakeholder and Community Engagement Plan.

Lendlease's investment management business is committed to connecting with and making a positive contribution to the local communities in which our assets are located. Community engagement undertaken by Lendlease is focused in regions and sectors where communities stand to benefit the most from its efforts e.g. shopping centres, retail precincts and associated community facilities.

Several examples include:

Barangaroo South: Lendlease believes there should be a local place that should be loved and owned by all. Lendlease aims to establish Barangaroo South as a exciting and local experienceby creating programming and placemaking initiatives that can be enjoyed by all. The asset implements tailored community offerings to ensure the precinct is well activated seven days a week, night and day. 

Community day: Lendlease's annual Community Day provides its employees the opportunity to give back to the communities in which they live and work. In line with Lendlease's global focus on sustainability, Community Day projects address social, economic and environmental issues. By matching its employees skills to a community project, Lendlease can contribute in a way that’s both meaningful and rewarding. Lendlease employees have volunteered  over 500,000 hours across many worthwhile community projects around the world, since 1996.

Tenant engagement: Initiatives and events undertaken by operations in shopping mall assets in Lendlease Investment Management Asia with themed sustainability events such as 313 Green & Gorgeous at 313@Somerset, Go Green at Parkway Parade, Green Discovery events that are focused on waste recycling initiatives and reducing food waste.

Waste recycling in Australian managed commercial and retail assets is an ongoing activity and combined with external and internal staff education and awareness with tenants on waste disposal and recycling practices, it has helped to improve waste recycling performance. Additionally, introducing organics recycling at selected commercial and retail assets has helped to also lift waste recycling performance.

Where required and appropriate, the Lendlease monitors its impact on the community through engagement with local law enforcement agencies, tracking of financial performance of our retail tenants and local competitors, the health and safety of our visitors and the provision and monitoring of important community services.