Video

ULI Asia Pacific Summit 2019 Delivering a Sustainable Future Date: October 09, 2019

00:00:15 --> 00:00:17: Delighted to take this panel forward. 00:00:17 --> 00:00:21: As you know, we're going to focus on delivering a 00:00:21 --> 00:00:22: sustainable future. 00:00:22 --> 00:00:26: I've got three eminent industry leaders with me. 00:00:26 --> 00:00:29: I won't go into CV's and details because we want 00:00:29 --> 00:00:32: to really focus on the topic that Lynette is this 00:00:32 --> 00:00:36: sustainability in charge of sustainability at capital land, 00:00:36 --> 00:00:39: and we know all know how much a large player 00:00:39 --> 00:00:41: capital land is in Asia. 00:00:44 --> 00:00:47: Tom is not Tom Owen. 00:00:47 --> 00:00:51: is the head of. 00:00:51 --> 00:00:55: Boston Properties and also is the Chairman elect of ULI 00:00:55 --> 00:00:58: and David joins us from Heinz in Australia. 00:00:58 --> 00:01:01: So three people who are very thing the leading role 00:01:01 --> 00:01:05: in in in in terms of development and sustainability. 00:01:05 --> 00:01:09: Now we are tasked with demonstrating that making a profit, 00:01:09 --> 00:01:13: making about making the world a better place the same 00:01:13 --> 00:01:15: time are not incompatible. 00:01:15 --> 00:01:18: So yes, we recognize the need to look at the 00:01:18 --> 00:01:21: bottom line or consider the bottom line. 00:01:21 --> 00:01:24: But we really believe that making the world a better 00:01:24 --> 00:01:28: place is also an important criteria and that delivering quality 00:01:28 --> 00:01:28: real estate, 00:01:28 --> 00:01:32: creating better places and enhance the quality of life are 00:01:32 --> 00:01:33: the secrets. 00:01:33 --> 00:01:36: If you like to a sustainable and profitable real estate 00:01:36 --> 00:01:36: business, 00:01:36 --> 00:01:39: and indeed, that's what you'll eye is all about. 00:01:39 --> 00:01:42: So what? I've asked each of the panelists to do 00:01:42 --> 00:01:45: is to think about how they address these challenges within 00:01:45 --> 00:01:49: their business and personally and from their own experience to

1 00:01:49 --> 00:01:52: share with us how it's possible to be aspirational. 00:01:52 --> 00:01:56: It's at the same time to achieve commercial success. 00:01:56 --> 00:01:59: What are the measures that they describe success and how 00:01:59 --> 00:02:02: is this aligned with the objectives of your lie and 00:02:02 --> 00:02:04: how do you make we we we saw on the 00:02:04 --> 00:02:09: on the questionnaire and answers questions how important community is. 00:02:09 --> 00:02:12: So how do you respond to impact on the community? 00:02:12 --> 00:02:14: And finally, how do we have in quality of life 00:02:15 --> 00:02:17: and resilience into your priorities? 00:02:17 --> 00:02:19: So what I'd like each of the panelists do is 00:02:19 --> 00:02:22: maybe spend 5 to 8 minutes if I may say, 00:02:22 --> 00:02:24: put it this way, laying out your store. 00:02:24 --> 00:02:27: Explain how you meet these challenges. 00:02:27 --> 00:02:30: And at the same and how you achieve a successful 00:02:30 --> 00:02:31: bottom line yesterday, 00:02:31 --> 00:02:34: same same time addressed sustainability issues, 00:02:34 --> 00:02:35: so maybe should we go? 00:02:35 --> 00:02:37: Ladies first Lynette sure please, 00:02:37 --> 00:02:41: thanks. Thanks Nick. And good morning ladies and gentlemen. 00:02:41 --> 00:02:42: So happy to be here. 00:02:42 --> 00:02:44: First of all, thank you. 00:02:44 --> 00:02:45: This is glass, not plastic. 00:02:45 --> 00:02:49: Thank you. Good, well done you are. 00:02:49 --> 00:02:53: I thought I was just giving a brief introduction of 00:02:53 --> 00:02:57: CapitaLand in case those four in Galt delegates may not 00:02:57 --> 00:02:58: know who capital N is, 00:02:58 --> 00:03:03: it's the largest real estate company listed on the Singapore 00:03:03 --> 00:03:06: Exchange and we are in the midst of a closing 00:03:06 --> 00:03:10: our merger with Ascendas and that will increase 00:03:10 --> 00:03:13: our AUM to approximately 90 billion dollars. 00:03:13 --> 00:03:17: We have a global footprint spread in our largest coverages 00:03:17 --> 00:03:18: in Singapore, 00:03:18 --> 00:03:21: China and India and expanding in Australia. 00:03:21 --> 00:03:23: I mean the rest of the world, 00:03:23 --> 00:03:25: basically. 00:03:25 --> 00:03:28: So we are actually I'm very happy to be here 00:03:28 --> 00:03:31: to discuss this topic because I think the keyword is 00:03:31 --> 00:03:32: sustainable, 00:03:32 --> 00:03:37: sustainable future. We have been looking at this topic for 00:03:37 --> 00:03:38: awhile.

2 00:03:38 --> 00:03:39: As you know it is. 00:03:39 --> 00:03:42: I don't think it's aspirational anymore. 00:03:42 --> 00:03:46: I think today when we talk about sustainability, 00:03:46 --> 00:03:49: we are looking at the world and how it's changing. 00:03:49 --> 00:03:52: We are confronted with climate change, 00:03:52 --> 00:03:54: alot of well, global warming, 00:03:54 --> 00:03:59: flash floods, rising sea levels in Singapore especially within the 00:03:59 --> 00:04:01: for the past 13 years. 00:04:01 --> 00:04:05: Out of the 15 years we have been experiencing increasing. 00:04:05 --> 00:04:10: Weather and is the is we've experienced the warmest weather 00:04:10 --> 00:04:12: in on record since 1929. 00:04:12 --> 00:04:16: We don't feel it in Singapore because our buildings are 00:04:16 --> 00:04:18: just too cold. 00:04:18 --> 00:04:20: If you know that. 00:04:20 --> 00:04:24: And also rising sea levels is affecting Singapore in a 00:04:24 --> 00:04:25: very big way. 00:04:25 --> 00:04:30: The government is already taking various actions on the eastern 00:04:30 --> 00:04:31: coast of Singapore. 00:04:31 --> 00:04:35: All the new developments have to be raised to at 00:04:35 --> 00:04:39: least 1 meter high than you Changi Airport Terminal that 00:04:39 --> 00:04:43: the Singapore Government is building will stand on land at 00:04:43 --> 00:04:45: 5.5 meters above the sea level. 00:04:45 --> 00:04:49: So this is what the we are preparing for. 00:04:49 --> 00:04:52: So I I guess there are a lot of risks 00:04:52 --> 00:04:52: that. 00:04:52 --> 00:04:55: That we're looking at, but I'm not here to talk 00:04:55 --> 00:04:58: about doom and gloom talking about opportunities. 00:04:58 --> 00:05:01: Otherwise I think everyone will leave the room. 00:05:01 --> 00:05:06: If you look at the the what the total investable 00:05:06 --> 00:05:09: capital in the universe is today, 00:05:09 --> 00:05:16: the International Finance Corporation, which is part of the World 00:05:16 --> 00:05:16: Bank, 00:05:16 --> 00:05:22: has made an estimate that about 20 trillion US dollars 00:05:22 --> 00:05:23: is 20 trillion. 00:05:23 --> 00:05:29: US dollars will be invested in Green Lake related projects 00:05:29 --> 00:05:32: in India and the Asia Pacific by 2030. 00:05:32 --> 00:05:37: 2030 is the timeline that the United Nations 993 countries 00:05:37 --> 00:05:41: of the United Nations have come together to make a 00:05:41 --> 00:05:46: pledge that by 2030 they have to achieve 17 sustainable

3 00:05:46 --> 00:05:50: development goals. In climate, change is one of them, 00:05:50 --> 00:05:54: so there's going to be a lot of capital invested 00:05:54 --> 00:05:55: in this area. 00:05:55 --> 00:06:00: In green related projects, and the banks are already accelerating 00:06:00 --> 00:06:01: that you see, 00:06:01 --> 00:06:03: banks coming up with green financing. 00:06:03 --> 00:06:08: In China alone, there's an acceleration towards that. 00:06:08 --> 00:06:11: Just between 2015 and 20 last year, 00:06:11 --> 00:06:16: China has already issued more than 30 billion US dollars 00:06:16 --> 00:06:21: of green financing and that second to the United States. 00:06:21 --> 00:06:26: Last year they were the issue 40. 00:06:26 --> 00:06:28: Different issues of green financing. 00:06:28 --> 00:06:33: And so we see that that is a very gives 00:06:33 --> 00:06:39: us a lot of opportunities at capital land we obtain. 00:06:39 --> 00:06:45: Greenlaw actually is a sustainability linked loan amounting to 300 00:06:45 --> 00:06:50: million Singapore dollars and this was the 1st and largest 00:06:50 --> 00:06:54: for Asia Real Estate and that was linked to such 00:06:54 --> 00:06:57: sustainability. 00:06:57 --> 00:07:03: More precisely to the ESG factors that's related to environment, 00:07:03 --> 00:07:07: social and governance factors, and this loan was a five 00:07:07 --> 00:07:10: year loan with which is multicurrency. 00:07:10 --> 00:07:15: And if we were to achieve all these sustainability factors, 00:07:15 --> 00:07:18: our interest rate will actually drop. 00:07:18 --> 00:07:21: So that provides more incentives for us. 00:07:21 --> 00:07:25: So we see that in China there are already 500 00:07:25 --> 00:07:27: green private equity funds, 00:07:27 --> 00:07:30: and so we see that there will be a lot 00:07:30 --> 00:07:33: more coming forth IT capital N in order to both 00:07:33 --> 00:07:37: mitigate risks as well as well as seize opportunities we 00:07:37 --> 00:07:43: have already integrated sustainability into our business strategy and making 00:07:43 --> 00:07:45: it a strategic thrust which is. 00:07:45 --> 00:07:48: Well, next month I officially. 00:07:48 --> 00:07:52: Appointed the my role as Chief Sustainability officer. 00:07:52 --> 00:07:57: Looking at how we can use sustainability to their best 00:07:58 --> 00:07:59: advantage. 00:07:59 --> 00:08:03: And. Rationalizing and relating this to the bottom line. 00:08:03 --> 00:08:05: Do you find a conflict? 00:08:05 --> 00:08:09: Sustainability trying to achieve these these wider goals? 00:08:09 --> 00:08:13: Does it impact on bottom line or absolutely we positively

4 00:08:13 --> 00:08:15: or negatively say absolutely? 00:08:15 --> 00:08:20: We see that, well, positively in the measure of value 00:08:20 --> 00:08:22: is in many ways. 00:08:22 --> 00:08:24: First of all we have, 00:08:24 --> 00:08:28: we have actually developed sustainability, 00:08:28 --> 00:08:33: building guidelines and at every stage of our building of 00:08:33 --> 00:08:35: a project lifecycle, 00:08:35 --> 00:08:40: from feasibility to all the way to operations and even 00:08:41 --> 00:08:43: to redevelopment of projects, 00:08:43 --> 00:08:47: we look at how we can enhance our. 00:08:47 --> 00:08:54: Our return through innovation through not just environmental sustainability factors, 00:08:54 --> 00:08:57: but in many, many other ways. 00:08:57 --> 00:09:01: So in order to also avoid disruption to ourselves and 00:09:01 --> 00:09:06: sustainability is not just about the environment, 00:09:06 --> 00:09:09: is about the longevity of the business. 00:09:09 --> 00:09:13: So therefore it is also about the people, 00:09:13 --> 00:09:17: the people who work for us and it's about talent. 00:09:17 --> 00:09:21: Retention and attraction is also about adding values of the 00:09:21 --> 00:09:23: communities that we serve, 00:09:23 --> 00:09:26: so we measure value in many ways and I will 00:09:26 --> 00:09:28: elaborate on that later on. 00:09:28 --> 00:09:32: OK, thank you know in addressing the challenge from your 00:09:32 --> 00:09:34: perspective the future. 00:09:34 --> 00:09:37: Yeah great again. Pleasure to be here as well Nick. 00:09:37 --> 00:09:41: Thank you very much. I don't know Boston Properties doesn't 00:09:41 --> 00:09:43: own any real estate in Asia, 00:09:43 --> 00:09:47: so I thought I'd spend 2 seconds and explain the 00:09:47 --> 00:09:49: company were the largest. 00:09:49 --> 00:09:53: Public company in the United States that focuses on office 00:09:53 --> 00:09:54: real estate. 00:09:54 --> 00:09:57: Ann were an owner, but we're also a developer Anwer 00:09:57 --> 00:09:59: in five major coastal markets, 00:09:59 --> 00:10:03: which is important. I'll come back to in a moment. 00:10:03 --> 00:10:07: Washington, New York, Boston, San Francisco and Los Angeles. 00:10:07 --> 00:10:10: We do have humbly and we're very proud of an 00:10:10 --> 00:10:13: industry leading sustainability program. 00:10:13 --> 00:10:15: We are, you know how, 00:10:15 --> 00:10:18: how can you say that we focus on our grasp 00:10:18 --> 00:10:18: ratings? 00:10:18 --> 00:10:22: So we in about. 7 or 800 other global property

5 00:10:22 --> 00:10:27: companies participate in the grasp surveys and we've been improving 00:10:27 --> 00:10:27: our scores. 00:10:27 --> 00:10:31: An our relative score has been coming down, 00:10:31 --> 00:10:34: which I think is a good thing for the industry. 00:10:34 --> 00:10:36: But we're still on the top 8% 00:10:36 --> 00:10:40: of companies globally, so we're very proud of that. 00:10:40 --> 00:10:44: We have publicly stated sustainability goals that we benchmark to 00:10:44 --> 00:10:47: each year in the public market, 00:10:47 --> 00:10:50: so energy reduction, emissions reduction. 00:10:50 --> 00:10:56: Water recycling and garbage waste diversion. 00:10:56 --> 00:10:59: And we you know, it's interesting we publish a. 00:10:59 --> 00:11:02: Annual report of our sustainability practices, 00:11:02 --> 00:11:04: and I think that's of more interest to the market 00:11:04 --> 00:11:08: or the constituents that we serve than our regular annual 00:11:08 --> 00:11:08: report, 00:11:08 --> 00:11:11: which I think is telling about the world rent. 00:11:11 --> 00:11:14: Before I get into some of the sustainability I do, 00:11:14 --> 00:11:17: I do want to just say at the outset though, 00:11:17 --> 00:11:20: that we do. We need to be a financially successful 00:11:20 --> 00:11:23: company to do all the good things that I'm about 00:11:23 --> 00:11:24: to describe. 00:11:24 --> 00:11:26: An I think you can do well and do the 00:11:26 --> 00:11:28: right thing as at the same time, 00:11:28 --> 00:11:30: and that's clearly what we try to do. 00:11:30 --> 00:11:33: And also I would say in terms of sustainability and 00:11:34 --> 00:11:36: some of the other things that I'm going to talk 00:11:36 --> 00:11:37: about, 00:11:37 --> 00:11:40: I actually, you know, I think we're doing the right 00:11:40 --> 00:11:40: thing, 00:11:40 --> 00:11:42: but I would also say importantly. 00:11:42 --> 00:11:45: For all of our constituents that we're doing the smart 00:11:45 --> 00:11:47: thing and what I mean by that is, 00:11:47 --> 00:11:49: as I think about sustainability. 00:11:49 --> 00:11:51: Specifically, you know why are we doing it? 00:11:51 --> 00:11:53: It's clearly the right thing. 00:11:53 --> 00:11:56: But it's also the smart thing our customers care about 00:11:56 --> 00:11:57: this a lot more. 00:11:57 --> 00:12:00: There's clearly a segment of our tenant base that. 00:12:00 --> 00:12:03: Believe it or not, it's probably not that interested in 00:12:03 --> 00:12:07: the sustainability characteristics of the buildings,

6 00:12:07 --> 00:12:09: but there are many that are so this year. 00:12:09 --> 00:12:12: Last year we delivered a major property with Heinz. 00:12:12 --> 00:12:16: Actually in San Francisco called the Salesforce Tower and Salesforce 00:12:16 --> 00:12:19: is our anchor tenant an you know they put out 00:12:19 --> 00:12:22: as much information as we do about the fact that 00:12:22 --> 00:12:24: the building is platinum rated. 00:12:24 --> 00:12:27: It's got one, certainly one of the highest ratings in 00:12:27 --> 00:12:28: San Francisco. 00:12:28 --> 00:12:30: They have a black water recycling system. 00:12:30 --> 00:12:34: That they've installed in the building and so they promote 00:12:34 --> 00:12:38: the sustainability characteristics of the building that we own. 00:12:38 --> 00:12:40: And there are major customer up, 00:12:40 --> 00:12:43: so I think I think that's important and we're seeing 00:12:43 --> 00:12:47: that being increasingly important shareholders care about this. 00:12:47 --> 00:12:50: When that talked about some of the capital that's coming 00:12:50 --> 00:12:51: into this business, 00:12:51 --> 00:12:54: we get it. We get asked about this a lot 00:12:54 --> 00:12:55: more by investors. 00:12:55 --> 00:12:59: There are new index funds coming out that literally overweight 00:12:59 --> 00:13:03: companies that have high sustainability ratings and underweight companies that 00:13:03 --> 00:13:04: don't. 00:13:04 --> 00:13:07: And that's only going to increase. 00:13:07 --> 00:13:10: You know it, certainly when speaking with younger investors and 00:13:10 --> 00:13:12: people that are focused on this, 00:13:12 --> 00:13:15: you know they want to invest in green oriented activities. 00:13:15 --> 00:13:18: So again, we're doing the smart thing is going to 00:13:18 --> 00:13:20: be able to track that capital we did our first 00:13:20 --> 00:13:22: green bond in the last year limit. 00:13:22 --> 00:13:26: Again, you mentioned this, but we probably had. 00:13:26 --> 00:13:30: You know a very significant percentage of the bondholders that 00:13:30 --> 00:13:33: bought that billion Dollar Bond issue were green investors, 00:13:33 --> 00:13:37: which was important. I think help the execution were in 00:13:37 --> 00:13:38: coastal cities. 00:13:38 --> 00:13:40: Are communities care about this? 00:13:40 --> 00:13:43: And so the more that we can demonstrate to them 00:13:43 --> 00:13:44: that we care as well, 00:13:44 --> 00:13:48: it helps in our relationships with our communities and frankly

7 00:13:48 --> 00:13:50: we need to get ahead of things. 00:13:50 --> 00:13:53: New York just came out on Earth Day with a 00:13:53 --> 00:13:57: Climate mobilization Act where they actually specified. 00:13:57 --> 00:14:01: Carbon emission targets per square foot that all landlords have 00:14:01 --> 00:14:02: to achieve by 2021. 00:14:02 --> 00:14:06: And then there's another hurdle at 2025 and so and 00:14:06 --> 00:14:09: this is going to promote better building systems and also 00:14:10 --> 00:14:11: the use of sustainable energy. 00:14:11 --> 00:14:15: So Fortunately we're going to make it through these hurdles, 00:14:15 --> 00:14:19: but that's because we've been after it for awhile. 00:14:19 --> 00:14:22: So again, we're doing the smart thing. 00:14:22 --> 00:14:24: And then the last thing is, 00:14:24 --> 00:14:26: I do think by being good at this, 00:14:26 --> 00:14:29: we've become a more purposeful company, 00:14:29 --> 00:14:31: and I think our employees appreciate that. 00:14:31 --> 00:14:34: I certainly makes me more proud of what we do 00:14:34 --> 00:14:35: as the leader, 00:14:35 --> 00:14:39: but more importantly, the committed and passionate team that we 00:14:39 --> 00:14:43: have believes that they're working for a more purposeful organization, 00:14:43 --> 00:14:45: and I think they drive a more a lot more 00:14:45 --> 00:14:48: satisfaction out of their work as a result. 00:14:48 --> 00:14:50: Thank you. Thank you, David. 00:14:50 --> 00:14:53: Addressing the challenge in Australia. 00:14:53 --> 00:14:55: Well, yeah, I think about that. 00:14:55 --> 00:14:58: Thank you for the opportunity first of all and and 00:14:58 --> 00:14:58: Nick, 00:14:58 --> 00:15:00: it's good to speak with you, 00:15:00 --> 00:15:03: so your proposition or your question was, 00:15:03 --> 00:15:06: is it possible to be aspirational in terms of sustainability, 00:15:06 --> 00:15:11: but also commercially successful? And my initial response to that 00:15:11 --> 00:15:13: is you've got to flip it on its head and 00:15:14 --> 00:15:17: actually say that the two have to go together. 00:15:17 --> 00:15:21: It's not possible to be commercially successful without being sustainable. 00:15:21 --> 00:15:26: I don't think it's an aspiration anymore and agree with 00:15:26 --> 00:15:28: Lynette's point there I think. 00:15:28 --> 00:15:30: The survey sort of demonstrated it, 00:15:30 --> 00:15:33: but but really sustainability's come a long way in the 00:15:33 --> 00:15:36: last 15 or 20 years that it used to be

8 00:15:36 --> 00:15:37: all about the environment. 00:15:37 --> 00:15:40: It used to be about energy efficiency and impact on 00:15:40 --> 00:15:41: climate. 00:15:41 --> 00:15:44: We used to measure it in terms of building ratings 00:15:44 --> 00:15:47: and performance targets and and it was almost viewed as 00:15:47 --> 00:15:48: a bit of a cost center. 00:15:48 --> 00:15:51: I think in in development projects. 00:15:51 --> 00:15:53: Yeah, it's very different today obviously, 00:15:53 --> 00:15:56: and I think it's a far broader concept and I 00:15:56 --> 00:15:58: think the ULI actually states it. 00:15:58 --> 00:16:00: And I'll. Look at my notes here. 00:16:00 --> 00:16:03: It's about the efficient use of resources and creating and 00:16:03 --> 00:16:05: maintaining a resilient built environment, 00:16:05 --> 00:16:08: so it's much more than just an environmental question now. 00:16:08 --> 00:16:12: It's it's about community. It's all of the stakeholders and 00:16:12 --> 00:16:15: it's about longevity in terms of assets. 00:16:15 --> 00:16:19: So I think that's the perspective that that we're looking 00:16:19 --> 00:16:21: at it from in terms of creating value. 00:16:21 --> 00:16:24: I think we all in the room recognize that creating 00:16:24 --> 00:16:26: great places creates value. 00:16:26 --> 00:16:29: That in itself is a sustainability principle, 00:16:29 --> 00:16:33: and I think we're now placing more value on ensuring 00:16:33 --> 00:16:34: that we can. 00:16:34 --> 00:16:38: Continue to Mike how assets relevant through their life cycles, 00:16:38 --> 00:16:42: so it's actually far more sustainable to be refreshing and 00:16:42 --> 00:16:45: rehabbing an existing asset that can never be to go 00:16:45 --> 00:16:46: and build a new asset, 00:16:46 --> 00:16:50: but by virtue of the environmental inputs that go into 00:16:50 --> 00:16:54: that so we need to understand and anticipate what do 00:16:54 --> 00:16:55: our end users want. 00:16:55 --> 00:16:59: And we need to be able to respond to that. 00:16:59 --> 00:17:03: And I think that's the connection really between sustainability and 00:17:03 --> 00:17:04: profitability as I see it. 00:17:04 --> 00:17:07: Is you really at the end of the day relying 00:17:07 --> 00:17:09: on our end users for commercial success? 00:17:09 --> 00:17:13: We can only achieve commercial success if we make these 00:17:14 --> 00:17:18: places sustainable such that our end users actually fall in 00:17:18 --> 00:17:19: love with them. 00:17:19 --> 00:17:21: So I think if I can indulge just for a 00:17:21 --> 00:17:24: moment and give an example of current example of of 00:17:25 --> 00:17:28: a Hines experience and our approach to sustainability and

9 how 00:17:28 --> 00:17:31: that's impacting in terms of profitability, 00:17:31 --> 00:17:34: I'll talk to a strategy that we're rolling out. 00:17:34 --> 00:17:36: In in the US and in Australia, 00:17:36 --> 00:17:40: actually at the moment, so we've observed in in various 00:17:40 --> 00:17:44: markets a really strong trend for millennials based office tenants 00:17:44 --> 00:17:48: to move to rehabbed industrial warehouse buildings outside of the 00:17:48 --> 00:17:51: CBD's. These are sort of urban fringe markets, 00:17:51 --> 00:17:55: there quite gritty and in some cases cases quite grungy 00:17:55 --> 00:17:55: in fact. 00:17:55 --> 00:18:00: But those tenants are making those moves for a variety 00:18:00 --> 00:18:01: of reasons. 00:18:01 --> 00:18:05: The spice has character and the tenants fall in love 00:18:05 --> 00:18:06: with it. 00:18:06 --> 00:18:09: Like these buildings are located in markets where. 00:18:09 --> 00:18:12: Big right places. There's a lot of amenity. 00:18:12 --> 00:18:15: There's bars, restaurants, cafes that provide the the out of 00:18:15 --> 00:18:18: office experience that the workforce is looking for. 00:18:18 --> 00:18:21: There's multiple modes of connectivity in terms of transit, 00:18:21 --> 00:18:26: footpaths, bikeways, so there's multiple different ways of getting to 00:18:26 --> 00:18:27: the office. 00:18:27 --> 00:18:30: Ann, and really importantly, I think there's an urban identity 00:18:31 --> 00:18:32: that goes with these locations. 00:18:32 --> 00:18:36: Ann and the tenants and their staff are actually identifying 00:18:36 --> 00:18:41: themselves and their their attaching their corporate cultures to these 00:18:41 --> 00:18:41: locations. 00:18:41 --> 00:18:45: So we're responding to that by building. 00:18:45 --> 00:18:49: Poly sustainable timber framed office creative office buildings into those 00:18:49 --> 00:18:49: markets. 00:18:49 --> 00:18:53: Financially, so far we've got 7 projects now underway. 00:18:53 --> 00:18:56: So far financially, it's been enormously successful, 00:18:56 --> 00:18:57: but at the same time, 00:18:57 --> 00:19:02: the sustainability benefits are obvious and their environmental and and 00:19:02 --> 00:19:04: less environmental and more social. 00:19:04 --> 00:19:10: Environmentally timber construction is a far superior outcome than traditional 00:19:10 --> 00:19:11: building methodologies.

10 00:19:11 --> 00:19:17: We know construction. The construction sector is a major emitter 00:19:17 --> 00:19:18: of CO2. 00:19:18 --> 00:19:21: Manufacture of concrete and steel. 00:19:21 --> 00:19:25: Significant outputs of CIT, on the other hand. 00:19:25 --> 00:19:28: The growth of plantation timber forests is actually pulling CO2 00:19:28 --> 00:19:30: out of the out of the atmosphere. 00:19:30 --> 00:19:33: It's it's a positive outcome. 00:19:33 --> 00:19:36: At the same time, there's other benefits that they probably 00:19:36 --> 00:19:37: harder to measure. 00:19:37 --> 00:19:39: We can actually measure that CO2 benefit, 00:19:39 --> 00:19:42: but there's others that I think they're just as valuable. 00:19:42 --> 00:19:45: The question of measurement, I think so really tricky one, 00:19:45 --> 00:19:49: but for example, there's various studies that living or working 00:19:49 --> 00:19:52: in environments where or buildings that have been constructed out 00:19:52 --> 00:19:53: of natural materials. 00:19:53 --> 00:19:56: There's there's clear health and well being benefits, 00:19:56 --> 00:19:58: lower heart rate, lower blood pressure, 00:19:58 --> 00:20:01: less absentees, and we believe that there is a positive 00:20:01 --> 00:20:02: social outcome in. 00:20:02 --> 00:20:07: Building these assets outside of CBD's working closer to home, 00:20:07 --> 00:20:11: reducing commute times. Giving people the individual more time with 00:20:11 --> 00:20:15: their family and friends rather than being in the office, 00:20:15 --> 00:20:18: it's a social benefit. It's a social outcome that's very 00:20:18 --> 00:20:18: positive. 00:20:18 --> 00:20:22: Providing high quality end of trip facilities to encourage the 00:20:22 --> 00:20:23: walk or the ride to work. 00:20:23 --> 00:20:27: Obviously, and environmental benefit taking cars off the road, 00:20:27 --> 00:20:29: but also the health and well being benefit that goes 00:20:29 --> 00:20:30: with that. 00:20:30 --> 00:20:33: I think all of that isn't encompassing sustainability, 00:20:33 --> 00:20:38: but leads to outperformance from a real estate perspective. 00:20:38 --> 00:20:41: I think one of the main outcomes of of thinking 00:20:41 --> 00:20:44: about sustainability in this way is that it does change 00:20:44 --> 00:20:48: our priorities as an owner and developer as we're composing 00:20:48 --> 00:20:51: new projects now or we're managing our existing assets. 00:20:51 --> 00:20:54: We're really just as focused now on the individual end 00:20:55 --> 00:20:57: user as we are on our corporate or our tenant 00:20:57 --> 00:21:01: customers and and I think that's probably the biggest shift

11 00:21:01 --> 00:21:05: that that we've seen. The decision making of our tenants, 00:21:05 --> 00:21:07: at least in Australia particularly, 00:21:07 --> 00:21:09: is very much now dictated by. 00:21:09 --> 00:21:11: What the individual staff members want, 00:21:11 --> 00:21:14: rather than you know occupancy densities. 00:21:14 --> 00:21:16: For example, I mean all of that has to be 00:21:16 --> 00:21:18: a part of the equation, 00:21:18 --> 00:21:21: but in terms of out performance from the real estate 00:21:21 --> 00:21:21: POV, 00:21:21 --> 00:21:24: we've gotta be responding to those requirements. 00:21:24 --> 00:21:27: So so that really needs us to to focus on 00:21:27 --> 00:21:31: the quality of life experience particularly is work and family 00:21:31 --> 00:21:35: and leisure blend together more and more quality of life 00:21:35 --> 00:21:38: is is really the key factor as far as sustainability 00:21:39 --> 00:21:39: goes. 00:21:39 --> 00:21:42: Thank you very much. Well thank you all three for 00:21:42 --> 00:21:43: your opening statements. 00:21:43 --> 00:21:45: Lynette. Let's focus a bit on on value, 00:21:45 --> 00:21:48: shall we? How do we value all the things that 00:21:48 --> 00:21:49: we're talking about? 00:21:49 --> 00:21:51: I mean, it's all well and good to make the 00:21:51 --> 00:21:53: fine statements if you like, 00:21:53 --> 00:21:57: but. Value measuring value. How do it capital and measure 00:21:57 --> 00:22:00: the success of the obvious initiatives? 00:22:00 --> 00:22:02: I think for us to have KP eyes, 00:22:02 --> 00:22:05: for instance, do you have targets? 00:22:05 --> 00:22:08: Yes. Well, first of all we are listed company, 00:22:08 --> 00:22:12: so I think the financial return is absolutely important. 00:22:12 --> 00:22:17: We have been registering increases in our return on equity 00:22:17 --> 00:22:20: every year and we're targeting 10 to 12% 00:22:20 --> 00:22:23: were nine point 3% now so that that with financial 00:22:23 --> 00:22:27: return then you can drive sustainability right? 00:22:27 --> 00:22:32: Then you can do all the different things but we. 00:22:32 --> 00:22:35: We feel that the in order to be able to 00:22:35 --> 00:22:36: continue doing well, 00:22:36 --> 00:22:38: we have to do good, 00:22:38 --> 00:22:41: but sustainability is not a CSR. 00:22:41 --> 00:22:43: It is part of the business. 00:22:43 --> 00:22:46: So in every area of our value chain we have 00:22:47 --> 00:22:50: to integrate that into the whole process. 00:22:50 --> 00:22:54: And I think David has articulated it very well and 00:22:54 --> 00:22:58: so maybe one example that I can give you is

12 00:22:58 --> 00:23:01: project that we have completed. 00:23:01 --> 00:23:06: In 2017, and that's the Raffles City Hangzhou project that's 00:23:06 --> 00:23:08: Doctor Wang's hometown, 00:23:08 --> 00:23:12: the city brain that he was referring to this, 00:23:12 --> 00:23:17: we are very, very honored that last week it was 00:23:17 --> 00:23:22: conford the prestigious World Gold winner in the retail category 00:23:22 --> 00:23:27: at the 2019 Flopsy World Pre Excellence Awards. 00:23:27 --> 00:23:31: So that is an endorsement of the how the project 00:23:31 --> 00:23:36: has been proven to be to be excellent in all 00:23:36 --> 00:23:39: the different disciplines of real estate, 00:23:39 --> 00:23:45: as well as adding positive contribution to the community. 00:23:45 --> 00:23:49: Having best practices in sustainability. 00:23:49 --> 00:23:52: So since the opening in 2017, 00:23:52 --> 00:23:57: it has the shopping mall has actually registered. 00:23:57 --> 00:24:01: 997% occupancy and it has maintained that. 00:24:01 --> 00:24:03: So that's the financial site, 00:24:03 --> 00:24:06: right? But on the other hand, 00:24:06 --> 00:24:10: we when we first set out to create this landmark 00:24:10 --> 00:24:11: development, 00:24:11 --> 00:24:15: we had sites on providing using that as a heart 00:24:15 --> 00:24:19: of a source to create civic and cultural and also 00:24:19 --> 00:24:23: community activities in the city center. 00:24:23 --> 00:24:27: And that was a few city center at that time. 00:24:27 --> 00:24:31: So we have achieved that with by drawing in a 00:24:31 --> 00:24:34: lot of the community in that area. 00:24:34 --> 00:24:37: The we have designed vibrant community spaces. 00:24:37 --> 00:24:41: We have also incorporated a lot of lush greenery within 00:24:42 --> 00:24:46: around the entire development in the harsh disease center that 00:24:46 --> 00:24:48: is absolutely necessary. 00:24:48 --> 00:24:53: Another aspect is that not only has it achieved commercial 00:24:53 --> 00:24:55: success since its opening, 00:24:55 --> 00:24:58: we have older scored a few firsts. 00:24:58 --> 00:25:01: And one is that it was the first project in 00:25:01 --> 00:25:03: China's Zhejiang province which, 00:25:03 --> 00:25:07: in which Hangzhou is located to fully utilize the building 00:25:07 --> 00:25:08: modeling. 00:25:10 --> 00:25:13: The BIM model and in it's in construction. 00:25:13 --> 00:25:17: It was also the first integrated development in Zhejiang province 00:25:18 --> 00:25:22: to be designed and constructed in accordance with the US 00:25:22 --> 00:25:24: lead Horn Shell Gold Standard.

13 00:25:24 --> 00:25:28: So we brought a new paradigm into the whole community 00:25:28 --> 00:25:29: in construction, 00:25:29 --> 00:25:32: and it was the first shopping mall in China to 00:25:32 --> 00:25:36: use natural ventilation on a large scale and to adapt 00:25:36 --> 00:25:38: to the local climate, 00:25:38 --> 00:25:41: the solar gain and day lighting concepts were. 00:25:41 --> 00:25:44: Designed in in the entire development, 00:25:44 --> 00:25:49: and we also had a very efficient building structure so 00:25:49 --> 00:25:53: that the amount of materials used construction was very low 00:25:53 --> 00:25:57: and the we also help to lower the overall energy 00:25:57 --> 00:26:00: consumption. So from the value perspective, 00:26:00 --> 00:26:05: it's financial. Absolutely necessary, but we also look at how 00:26:05 --> 00:26:09: we are able to contribute to the Community through these 00:26:09 --> 00:26:11: different ways. 00:26:11 --> 00:26:15: So so. It's a it's about adding value to the 00:26:15 --> 00:26:16: community, 00:26:16 --> 00:26:19: and as I think David articulated this long list of 00:26:19 --> 00:26:23: the all the advantages we can bring to people who 00:26:23 --> 00:26:27: are working in our development as well as our own 00:26:27 --> 00:26:32: employees and being able to uplift and upskill people in 00:26:32 --> 00:26:36: in the latest technology and in the latest innovation. 00:26:36 --> 00:26:40: And in our design, we also look at many different 00:26:40 --> 00:26:42: ways of ensuring that. 00:26:42 --> 00:26:46: Ensuring vibrancy as well as Accessibility, 00:26:46 --> 00:26:52: Accessibility meaning to allow different people with different types of 00:26:52 --> 00:26:55: mobility to use our assets. 00:26:55 --> 00:27:00: So is optimizing the land use as well so that 00:27:00 --> 00:27:02: we can eventually. 00:27:02 --> 00:27:06: Yield the best return for investors. 00:27:06 --> 00:27:09: No, in measuring value, I mean some cynics will say 00:27:09 --> 00:27:12: lead and other things of that nature. 00:27:12 --> 00:27:16: Other thing, other initiatives out nature about bajingan. 00:27:16 --> 00:27:19: Do they really lead to a sustainable outcome? 00:27:19 --> 00:27:22: I mean, just you really haven't absolutely now. 00:27:22 --> 00:27:26: The well I mentioned in my opening remarks about. 00:27:26 --> 00:27:30: The reasons that we do this beyond doing the right 00:27:30 --> 00:27:30: thing, 00:27:30 --> 00:27:35: you know the Community, shareholder employee and customer impact. 00:27:35 --> 00:27:36: But in terms of you know, 00:27:36 --> 00:27:41: precise measurements. I'd kind of broaden out that question frankly

14 00:27:41 --> 00:27:42: a little bit. 00:27:42 --> 00:27:44: Based on the responses that we got. 00:27:44 --> 00:27:48: So first of all, in terms of sustainability impact, 00:27:48 --> 00:27:52: we measure and report publicly the emissions per square foot 00:27:52 --> 00:27:53: of all of our buildings. 00:27:53 --> 00:27:56: The energy intensity of all of our buildings, 00:27:56 --> 00:27:59: the. Water use in all of our buildings and the 00:27:59 --> 00:28:02: waste diversion and all of our building. 00:28:02 --> 00:28:04: So this is all public information. 00:28:04 --> 00:28:07: We've got targets to reduce these numbers somewhere between 30 00:28:07 --> 00:28:08: and 50% 00:28:08 --> 00:28:09: over the next five years. 00:28:09 --> 00:28:12: And by the way we've been doing this for a 00:28:12 --> 00:28:14: bunch of years and we already hit our first level 00:28:14 --> 00:28:15: of target. 00:28:15 --> 00:28:17: So you know, those are real. 00:28:17 --> 00:28:20: They're measured and we put him out there publicly so 00:28:20 --> 00:28:21: everyone can judge us. 00:28:21 --> 00:28:24: But Nikki, I would I would broaden out this question 00:28:24 --> 00:28:25: a little bit is interesting. 00:28:25 --> 00:28:27: The answer to the poll. 00:28:27 --> 00:28:30: Sustainability was kind of down the list in terms of 00:28:30 --> 00:28:30: impact. 00:28:30 --> 00:28:33: There was a lot more focus on the built environment 00:28:33 --> 00:28:35: and what kinds of impacts do you have. 00:28:35 --> 00:28:37: And again, going back to my comments about being a 00:28:37 --> 00:28:38: purposeful company, 00:28:38 --> 00:28:41: you know as a builder you have a unique opportunity 00:28:41 --> 00:28:42: to make a big impact. 00:28:42 --> 00:28:45: And I think about our own. 00:28:45 --> 00:28:47: Business, I'll go back to Salesforce Tower. 00:28:47 --> 00:28:49: The top of that building, 00:28:49 --> 00:28:52: which is that it's 1000 feet which to us in 00:28:52 --> 00:28:54: San Francisco is a lot here in Shanghai. 00:28:54 --> 00:28:56: That's probably not a lot, 00:28:56 --> 00:28:59: but the top 12 to 14 stories of that building 00:28:59 --> 00:29:01: is actually a public art exhibit. 00:29:01 --> 00:29:03: It's electronic billboard if you will, 00:29:03 --> 00:29:05: that surrounds the whole building. 00:29:05 --> 00:29:07: We don't control it. An artist does,

15 00:29:07 --> 00:29:11: so you know, every night there is a artistic display 00:29:11 --> 00:29:14: at the top of San Francisco that everybody in the 00:29:14 --> 00:29:15: city can watch so. 00:29:15 --> 00:29:18: You know, again, we're not controlling that, 00:29:18 --> 00:29:21: but our company built that and owns the building. 00:29:21 --> 00:29:24: When I think about the community, 00:29:24 --> 00:29:27: things that we've enhanced. For example, 00:29:27 --> 00:29:28: in Boston at the Pru, 00:29:28 --> 00:29:31: with all of the new retail food venues, 00:29:31 --> 00:29:34: the rehabs that we've done in that in that complex 00:29:34 --> 00:29:38: in New York City we have a major portfolio of 00:29:38 --> 00:29:42: assets at 53rd and Lexington Ave that we've completely renovated 00:29:42 --> 00:29:46: and opened up new entertainment and food venues. 00:29:46 --> 00:29:47: That are opening this fall again, 00:29:47 --> 00:29:50: a complete reorganization of the neighborhood, 00:29:50 --> 00:29:52: which has great financial outcomes, 00:29:52 --> 00:29:55: but I think great outcomes for the community. 00:29:55 --> 00:29:58: And then the other things that to think about that 00:29:59 --> 00:29:59: I do, 00:29:59 --> 00:30:01: at least about impact our. 00:30:01 --> 00:30:03: I want all of the jobs that are that we're 00:30:04 --> 00:30:05: creating as part of this. 00:30:05 --> 00:30:08: Not only people who work at Boston Properties, 00:30:08 --> 00:30:11: you know who obviously are paid fair wages, 00:30:11 --> 00:30:14: but also all of the service providers to us that 00:30:15 --> 00:30:19: all the construction workers and contractors and architects and brokers 00:30:19 --> 00:30:21: and the jobs that we create. 00:30:21 --> 00:30:26: Public real estate innocence is the democratization of real estate. 00:30:26 --> 00:30:28: You can, as we say, 00:30:28 --> 00:30:31: for $130 you can own a piece of the General 00:30:31 --> 00:30:35: Motors building in New York and those savers and those 00:30:35 --> 00:30:37: individual savers who have. 00:30:37 --> 00:30:39: Stocks like ours in their portfolio, 00:30:39 --> 00:30:42: they need that return for their retirement, 00:30:42 --> 00:30:45: so again, that's an impact that we're having. 00:30:45 --> 00:30:48: We're helping individuals save for their retirement in many of 00:30:48 --> 00:30:52: the communities that we operate where the you know where 00:30:52 --> 00:30:54: the largest or one of the top five taxpayers. 00:30:54 --> 00:30:56: So you could say, well, 00:30:56 --> 00:30:58: of course you already supposed to do that,

16 00:30:58 --> 00:31:01: but you know those monies go to public coffers that 00:31:01 --> 00:31:04: pay for a lot of public public service, 00:31:04 --> 00:31:07: and then I also think about examples that we try 00:31:07 --> 00:31:08: to set. 00:31:08 --> 00:31:11: Not only in sustainability, but in the transparency of what 00:31:11 --> 00:31:12: we do, 00:31:12 --> 00:31:13: but also in the governance. 00:31:13 --> 00:31:17: So you know they're all particularly around a public company. 00:31:17 --> 00:31:21: There's all kinds of governance provisions around domicile and board 00:31:21 --> 00:31:22: activity, 00:31:22 --> 00:31:25: and proxy access and Boston Properties is a leader in 00:31:25 --> 00:31:26: many of these areas. 00:31:26 --> 00:31:29: And again, I think a lot of impact that we 00:31:29 --> 00:31:32: have is to provide some of that industry leadership. 00:31:32 --> 00:31:35: So sustainability is important and we're proud of it and 00:31:35 --> 00:31:37: we're excited about doing it, 00:31:37 --> 00:31:39: but I think. In terms of what we do, 00:31:39 --> 00:31:42: there's lots of other impacts needs to be examined around. 00:31:42 --> 00:31:45: Yeah, yes, yeah David. We've got lots of questions from 00:31:45 --> 00:31:46: the audience. 00:31:46 --> 00:31:48: So can I start with you with some questions with 00:31:48 --> 00:31:51: a question from the audience 'cause I know it's something 00:31:51 --> 00:31:53: that Hines is very focused on. 00:31:53 --> 00:31:56: The question here about end user experience and particularly in 00:31:56 --> 00:31:59: the area of Wellness and indoor air quality. 00:31:59 --> 00:32:02: And I mean you touched upon the importance of relating 00:32:02 --> 00:32:04: to the needs and wants of the end users may 00:32:04 --> 00:32:06: be about to pick that up. 00:32:06 --> 00:32:10: Yes, I think that's that's probably as good today measure 00:32:10 --> 00:32:14: of of the all encompassing sustainability picture as I was 00:32:15 --> 00:32:17: articulating it that I can think of. 00:32:17 --> 00:32:21: I think a lot of these things are actually really 00:32:21 --> 00:32:26: difficult to measure because they are all subjective. 00:32:26 --> 00:32:29: I think I would rise to a really good point, 00:32:29 --> 00:32:32: which is, you know, with the public art example at 00:32:32 --> 00:32:33: Salesforce Tower. 00:32:33 --> 00:32:35: You don't get paid for that. 00:32:35 --> 00:32:38: It's really hard for us to measure value attaching with 00:32:39 --> 00:32:39: that. 00:32:39 --> 00:32:42: But there is an inherent value.

17 00:32:42 --> 00:32:45: In terms of what it does for your brand and 00:32:45 --> 00:32:46: your reputation, 00:32:46 --> 00:32:50: and you're giving back to the community and and that 00:32:50 --> 00:32:50: will. 00:32:50 --> 00:32:53: Be of some value to your business in the future, 00:32:53 --> 00:32:56: but very, very hard to to to quantify, 00:32:56 --> 00:32:59: I suppose. And that's probably the big challenges. 00:32:59 --> 00:33:01: How do we? How do we attach a value to 00:33:01 --> 00:33:04: these things that we're doing for me again? 00:33:04 --> 00:33:07: And some of my answers probably demonstrate that I'm a 00:33:07 --> 00:33:10: gritty down in the down in the mud and blood 00:33:10 --> 00:33:11: and guts, 00:33:11 --> 00:33:15: operator and developer, but I think for me the best 00:33:15 --> 00:33:16: measure of. 00:33:16 --> 00:33:20: Value or test of how you doing on sustainability is 00:33:20 --> 00:33:22: the experience of your user. 00:33:22 --> 00:33:25: If you're retaining your tenants. 00:33:25 --> 00:33:27: And you're doing it on the basis of the quality 00:33:27 --> 00:33:28: of your product. 00:33:28 --> 00:33:31: Then there's a good chance that you're doing pretty well 00:33:31 --> 00:33:34: on the sustainability front in terms of responding to all 00:33:34 --> 00:33:35: of those issues, 00:33:35 --> 00:33:37: not just the environmental issues, 00:33:37 --> 00:33:40: but all of the end user experience issues as well. 00:33:40 --> 00:33:44: So so that's where we really focus. 00:33:44 --> 00:33:46: I mean, of course all of the ratings of your 00:33:47 --> 00:33:50: buildings in terms of environmental performance and, 00:33:50 --> 00:33:53: well, ratings and all those things are very important. 00:33:53 --> 00:33:55: We we we take them very seriously, 00:33:55 --> 00:33:58: but we're also very focused on that end user experience. 00:33:58 --> 00:34:02: And again, it's about making sure that we can keep 00:34:02 --> 00:34:05: our building relevant going forward. 00:34:05 --> 00:34:08: Look at this question here about climate change and you 00:34:08 --> 00:34:10: know what we were talking about. 00:34:10 --> 00:34:12: We've been talking about Iran, 00:34:12 --> 00:34:16: largely defensive. If you like in a raising buildings etc 00:34:16 --> 00:34:17: etc to avoid flooding etc. 00:34:17 --> 00:34:20: And decision here that we ought to be as the 00:34:20 --> 00:34:24: property professional like much more creative in how we're dealing 00:34:24 --> 00:34:25: with climate change, 00:34:25 --> 00:34:27: is that something at capital?

18 00:34:27 --> 00:34:29: And if you're thinking about it, 00:34:29 --> 00:34:32: I mean, yes, you have to be defensive of course, 00:34:32 --> 00:34:35: but also within your designs within your planning. 00:34:35 --> 00:34:38: Building in response to climate change. 00:34:38 --> 00:34:41: Yeah, well, we think that the greatest impact that we 00:34:42 --> 00:34:45: can do is to start from the planning and the 00:34:45 --> 00:34:45: design stage. 00:34:45 --> 00:34:48: So if you can do the design of the building, 00:34:48 --> 00:34:51: well, lot of problems will be solved. 00:34:51 --> 00:34:54: And so with that in mind it's just another example 00:34:54 --> 00:34:58: of a building that we we completed in Singapore and 00:34:58 --> 00:35:00: that's called Capita Green. 00:35:00 --> 00:35:04: You is quite easily recognizable by the flower on top 00:35:04 --> 00:35:07: and that serves a very good purpose. 00:35:07 --> 00:35:09: Besides being a statically pleasing, 00:35:09 --> 00:35:12: it is actually. It draws in cool air from the 00:35:13 --> 00:35:16: top of the building without having to use to power 00:35:16 --> 00:35:18: up the Hughes on top. 00:35:18 --> 00:35:20: So the way it's designed, 00:35:20 --> 00:35:23: it will naturally draw cool and it's 2 degrees lower 00:35:23 --> 00:35:27: in temperature above and we have got a rooftop garden 00:35:27 --> 00:35:32: with lush greenery so that cools the temperatures down tremendously 00:35:32 --> 00:35:36: so as it cools down the entire building we use 00:35:36 --> 00:35:37: less energy. 00:35:37 --> 00:35:40: To power up our air conditioning, 00:35:40 --> 00:35:45: so with that we have managed to save our energy 00:35:45 --> 00:35:49: consumption in dollar terms by at least 10% 00:35:49 --> 00:35:54: in dollar terms and with that we have also attained 00:35:54 --> 00:35:56: very high occupancy rate. 00:35:56 --> 00:36:01: Our we have maintained occupancy rate of above 99% 00:36:01 --> 00:36:03: since its opening in 2014. 00:36:03 --> 00:36:06: Our rents are also these 10% 00:36:06 --> 00:36:10: premium above market rents. So you know it pays to 00:36:10 --> 00:36:14: be sustainable because as you bring in all these very 00:36:15 --> 00:36:17: green features in the building, 00:36:17 --> 00:36:21: and that's a desirable factor for millennials these days, 00:36:21 --> 00:36:25: the employees of big and menses are now asking the 00:36:25 --> 00:36:29: boss is what are you doing about sustainability? 00:36:29 --> 00:36:32: And so this is a very good point that tenants 00:36:32 --> 00:36:36: can make to their employees that we are taking care 00:36:36 --> 00:36:36: of.

19 00:36:36 --> 00:36:40: You were concerned about your health concern about your safety 00:36:40 --> 00:36:42: and to be with the right landlord. 00:36:42 --> 00:36:45: I think gives us a lot of credibility and that 00:36:45 --> 00:36:49: in turn will fuel the whole financial return as well. 00:36:49 --> 00:36:52: Thank you in a quick question for you. 00:36:52 --> 00:36:54: How are we going to spend the money that you 00:36:55 --> 00:36:56: raised with your green bonds? 00:36:56 --> 00:36:58: People want to know? Yeah, 00:36:58 --> 00:37:00: how we're going to invest it. 00:37:00 --> 00:37:03: Well, the. 00:37:03 --> 00:37:04: To qualify as a green bond, 00:37:04 --> 00:37:07: you have to use a capital to build gold, 00:37:07 --> 00:37:10: LEED certified buildings, or greater than all of our we 00:37:10 --> 00:37:14: have always underway somewhere between 3 and 4 billion dollars 00:37:14 --> 00:37:17: of new development and all the buildings we build today 00:37:17 --> 00:37:19: or built to those standards. 00:37:19 --> 00:37:22: So that's what we're using the capital for him. 00:37:22 --> 00:37:26: That's why it qualifies to be a green bond. 00:37:26 --> 00:37:28: I'm conscious of time and I see we have 4 00:37:28 --> 00:37:29: seconds, 00:37:29 --> 00:37:31: so just. 00:37:31 --> 00:37:35: Final question, and if you would just answer it fairly 00:37:35 --> 00:37:35: succinctly, 00:37:35 --> 00:37:38: if you could just your your advice, 00:37:38 --> 00:37:41: those who really want to make a difference. 00:37:41 --> 00:37:44: Just one way that they could make a difference. 00:37:44 --> 00:37:47: Your suggestions are basically in the context of you a 00:37:47 --> 00:37:48: lion, 00:37:48 --> 00:37:50: the the principles and things we stand for. 00:37:50 --> 00:37:53: Yeah, if you want if you are advising someone to 00:37:53 --> 00:37:55: how could they make a difference? 00:37:55 --> 00:37:58: Yeah, well I think if you know making a difference 00:37:58 --> 00:38:00: is a super broad topic. 00:38:00 --> 00:38:02: You know life is choices so you have to decide 00:38:02 --> 00:38:05: how you want to make that difference. 00:38:05 --> 00:38:08: But let's narrow it down and talk a little bit 00:38:08 --> 00:38:10: about sustainability. 00:38:10 --> 00:38:13: So I think about it at Boston properties. 00:38:13 --> 00:38:14: Why are we good at it? 00:38:14 --> 00:38:17: Well, we certainly have commitment from management, 00:38:17 --> 00:38:20: but we have a passion in the organization and that's

20 00:38:20 --> 00:38:23: we have a director of sustainability. 00:38:23 --> 00:38:25: He's a decorated person for his work, 00:38:25 --> 00:38:28: but he works with people throughout the company that are 00:38:28 --> 00:38:33: involved in either measuring outcomes or working on rehabbing existing 00:38:33 --> 00:38:36: building buildings to have better sustainability outcomes. 00:38:36 --> 00:38:40: So there's a much broader team in the company that's 00:38:40 --> 00:38:40: doing that so. 00:38:40 --> 00:38:42: You know, I think the key is to figure out 00:38:42 --> 00:38:43: exactly what you want to do, 00:38:43 --> 00:38:45: and then importantly. 00:38:45 --> 00:38:49: Particularly, the more junior person find a company that is 00:38:49 --> 00:38:51: committed and passionate about this topic, 00:38:51 --> 00:38:52: but part of the culture. 00:38:52 --> 00:38:56: Yeah, part of the culture David making a difference. 00:38:56 --> 00:38:59: Your recommendation, commitment, commitment to quality. 00:38:59 --> 00:39:01: I think commitment to efficiency as well. 00:39:01 --> 00:39:06: I think you've really got to understand. 00:39:06 --> 00:39:07: What you trying to achieve, 00:39:07 --> 00:39:10: so you've kind of got to define the sustainability that 00:39:10 --> 00:39:12: you're trying to achieve first of all, 00:39:12 --> 00:39:15: and then you've got to find an efficient way of 00:39:15 --> 00:39:15: delivering it, 00:39:15 --> 00:39:18: and I think it's in the context of what your 00:39:18 --> 00:39:19: stakeholders want, 00:39:19 --> 00:39:21: and I think going back to our example of our 00:39:21 --> 00:39:23: timber frame construction, 00:39:23 --> 00:39:24: that's what we we did there we, 00:39:24 --> 00:39:27: we identified a need we actually dusted off a very 00:39:27 --> 00:39:28: old technology, 00:39:28 --> 00:39:31: and I think that's another thing to say is don't 00:39:31 --> 00:39:32: be afraid of. 00:39:32 --> 00:39:37: Yeah, rehashing something. Not all innovation is knew some innovation 00:39:37 --> 00:39:41: is actually a re purposing of something that's already there 00:39:41 --> 00:39:43: and and we just apply that in in in a 00:39:43 --> 00:39:47: different way. So yeah, I think it's it's that it's 00:39:47 --> 00:39:48: commitment, 00:39:48 --> 00:39:53: its definition, of of what your purposes and and understanding 00:39:53 --> 00:39:55: what your your end user needs. 00:39:55 --> 00:39:58: Lynette making a difference I think.

21 00:39:58 --> 00:40:01: Would you just people do it? 00:40:01 --> 00:40:04: Yeah, it's a very exciting area to be in right 00:40:04 --> 00:40:05: now. 00:40:05 --> 00:40:09: Is there a lot of opportunities for us to innovate 00:40:09 --> 00:40:10: in this area? 00:40:10 --> 00:40:14: We have? We're using digital technology to enable us to 00:40:14 --> 00:40:15: look at, 00:40:15 --> 00:40:18: for example, the indoor air quality on a real time 00:40:19 --> 00:40:19: basis. 00:40:19 --> 00:40:21: How do we measure that? 00:40:21 --> 00:40:25: And with data analytics with? 00:40:25 --> 00:40:30: Different kinds of innovation and we partner with established companies 00:40:30 --> 00:40:34: as well as startups to find new solutions to solve 00:40:34 --> 00:40:35: this global problem. 00:40:35 --> 00:40:38: We've buildings account for 30 to 40% 00:40:38 --> 00:40:42: of total carbon emissions, and that's a huge factor in 00:40:42 --> 00:40:44: we as a growing company. 00:40:44 --> 00:40:48: That's got scale we need to influence and be able 00:40:48 --> 00:40:50: to have a positive impact. 00:40:50 --> 00:40:54: So I think reducing the energy consumption is of utmost 00:40:54 --> 00:40:55: importance. 00:40:55 --> 00:41:00: We. We are looking at Greening all our properties 100% 00:41:00 --> 00:41:06: having green certifications by 2030 and also having zero. 00:41:06 --> 00:41:09: Well, zero, I think is very very challenging in law, 00:41:09 --> 00:41:13: low energy buildings, and that's what we're aiming for. 00:41:13 --> 00:41:18: So all this requires a lot of innovation and creativity. 00:41:18 --> 00:41:22: In building design as well as in operations as well, 00:41:22 --> 00:41:25: because in order to sustain that, 00:41:25 --> 00:41:29: we need people who are passionate and always looking at 00:41:29 --> 00:41:32: ways to reduce energy consumption. 00:41:32 --> 00:41:37: Water consumption as well, and I think that it is. 00:41:37 --> 00:41:43: I would encourage everyone to make sustainability and market differentiator 00:41:43 --> 00:41:45: before it becomes mandatory. 00:41:45 --> 00:41:48: Thank you Lynette Davido, and thank you all very much. 00:41:48 --> 00:41:51: I think we have demonstrated that it is very possible 00:41:52 --> 00:41:55: to take things forward and to deliver a sustainable future 00:41:55 --> 00:41:58: as well as commentators and acceptable bottom line. 00:41:58 --> 00:42:01: So thank you all very much and audience. 00:42:01 --> 00:42:03: Would you join me in? 00:42:03 --> 00:42:05: Recognizing the contribution from the panel,

22 00:42:05 --> 00:42:05: thank you.

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