Holiday Inn Express Hotel NABERS Ratings

Pro-invest Group’s Holiday Inn Express Hotels NABERS Hotel Ratings White Paper

September 2020

August 2020 5 Holiday Inn Express Hotels NABERS Ratings

Facing Today with a View for As Australia faces overcoming the COVID- Tomorrow 19 pandemic, there is another key crisis that In February and March of 2020, the COVID- should not be overshadowed – climate 19 pandemic struck. Much of the world change. faced mass closures, crippling some of the Global warming has already reached 1.1o C world’s major cities. With many industries above the pre-industrial level.1 Australia is and sectors across the globe still at a stand- in turn experiencing higher temperatures still and social distancing continuing to be and coastal sea levels which are coupled enforced, the hospitality sector has with more frequent and severe heatwaves arguably been hit harder than any other and bushfire weather conditions.1 According sector. to a recent report by the Australian In Australia, the month of March 2020 Government, average surface air marked a period of change like no other, as temperatures in Australia have warmed by hotels ceased normal trading. By April 2020, c. 1.4oC since 1910.1 Warming of greater hotels across Australia were no longer than 2oC is modelled to result in a higher operating, while many had changed their frequency of unprecedented high operating models and opened their doors as temperatures and greater risks to the quarantine hubs, supporting the Australian manner in which we live and to the Government by offering “self-isolation” environment.1 accommodation for people returning to The Australian Government’s initial Paris Australia. Positively, from June 2020 Agreement target is to achieve a 26% to onwards, hotels progressively started 28% reduction in emissions by 2030 relative reopening their doors, as social distancing to 2005 levels.1 However, more ambitious restrictions across Australia began easing – targets will be necessary in Australia and albeit at varying stages. globally as time progresses to meet the “Offices and shopping centres goals of the Paris Agreement.1 As a result, participating in NABERS have saved emissions reduction policies implemented over a billion dollars in energy and today should be sufficiently flexible and water bills, while leading the world in scalable to deliver emissions reductions reducing carbon emissions. These kind beyond those required for the 2030 targets.1 of savings are possible in Australian We all share the responsibility to assist in hotels. lowering Australia’s impact and there are We are working with leaders doing just many opportunities for governments, that: using sustainability to reduce cost, industries, companies and householders to make their hotels more attractive to do more to reduce emissions. corporates, and bounce back stronger from the pandemic.” Sustainability Still a Key Agenda – Carlos Flores, Director at NABERS In the midst of current uncertainty, building, operating and managing for a better, However, with such a large focus on battling cleaner built environment to assist in out COVID-19 and with subsequent battling climate change continues to be at reductions in resources, it is the forefront of NABERS’ agenda. understandable that many companies are focusing on the here and now, and how to NABERS for hotels is a tool designed to get business back to normal – whatever the give hotels a one to six-star rating for energy new normal may be. and water efficiency. The tool rates hotel

1 Australian Government, Prospering in a Low-Emissions World, March 2020.

1 Holiday Inn Express Hotels NABERS Ratings spaces, including all facilities provided for What Gets Measured, Gets Managed the hotel guests and staff. The water and The NABERS hotel tool assists property energy used in non-hotel areas onsite, such owners and managers in obtaining a third- as public retail areas, can be excluded from party assessment of their hotel’s energy the rating. and/or water consumption. With the ratings produced on a 0.5-star increment – rated to “The impacts of climate change are the nearest lowest 0.5-stars, NABERS being felt in Australia and around the provides property owners and managers world and are projected to intensify. with the incentive to increase their rating, Global action to reduce greenhouse gas benchmarking their own performance year- emissions will need to accelerate if we on-year but also enabling a comparison are to ensure the safety of our relative to other NABERS rated hotels communities, secure our health and across states in Australia. wellbeing, and achieve positive With NABERS assisting in understanding outcomes for economic productivity how a building performs, this knowledge and the natural environment.” and subsequent management often leads to – Prospering in a Low Emissions World, reduced operating expenses and increased Australian Government, March 2020 market value. Optimal building operations As of August 2020, there are 25 hotels with translate into reduced emissions, waste to NABERS ratings around Australia. To date, landfill and water wasted. Holding a there have been almost 200 hotel ratings, NABERS rating assists in attracting with an average Energy rating of 3.5-stars environmentally conscientious stakeholders and an average Water rating of 3.2-stars across the spectrum – including hotel (across all hotel ratings). guests, front-line and or corporate staff and importantly, investors. As of August 2020, 5-stars is the highest active rating for the hotels sector in Increasingly, many investor bodies are Australia, with three properties actively demanding third-party accredited ratings, holding such a rating: the Holiday Inn with NABERS being a straightforward and Express Newcastle in NSW, the Mercure simple tool to use to communicate an Darwin Airport Resort in the NT and Adina asset’s environmental performance. Serviced Apartments Canberra Dickson in the ACT. Building & Operating for the Future – Pro-invest Group’s Hotels Figure 1: Hotel Properties Holding NABERS Ratings Across Australia, as at August 2020 With a hotel portfolio of 12 hotels with 2,864 rooms strategically positioned across Australia and New Zealand, Pro-invest Group (Pro-invest) has 6 operational hotels, with the remainder in various stages of development. Pro-invest has a franchise agreement with hotel giant InterContinental Hotels Group (IHG) for the roll-out of its select service Holiday Inn Express and lifestyle hotel brands. Pro-invest’s first hotel commenced operation in April 2016 and has since seen a rapid portfolio growth. With this pipeline expansion, the Group ramped up its Source: NABERS Website, Find a Current Rating, August sustainability agendas and efforts to ensure 2020.

2 Holiday Inn Express Hotels NABERS Ratings reduced environmental impact wherever provision of reed switches on guest room feasible, incorporating ESG efforts across doors and passive infra-red (PIR) sensors. its business framework. A key element to The installation of master switches at the the roll-out of its ESG framework is adopting entry vestibule and bedside enhances the NABERS Energy and Water ratings across likelihood of guests and staff turning all its hotel portfolio. lights off. All in-room lighting is LED, “We have always considered hotels an reducing energy consumption. integral part of any diversified real Time activated PIR sensors are located in estate portfolio. It is not only about all back of house storerooms, guest location, location, location: we search corridors and washrooms, again reducing for qualified operators and managers power consumption when not in use. who are able to run their hotels sustainably and profitably. Holiday Inn Express Sydney The location, property, concept and Macquarie Park, NSW, Australia operator all need to be aligned in order Hotel Specifications: to deliver a successful and profitable Sydney Macquarie Park, Location investment.” NSW, Australia – Dirk Schuldes, Global Head Real Select Service Hotel Property Type Estate Markets Hospitality, Commerz Plus Retail (c. 100m2) Real AG Lower Ground, Under Floors Pro-invest’s base hotel design is capable of Ground, Plus 7 Levels achieving a 4.5-star NABERS rating once Hotel Rooms 192 >12 months operational, with the Group challenging its own achievements to push Acquisition Q4 2013 further in targeting 5-star NABERS Energy Date ratings once >12 months operational across its Pro-invest Australian Hospitality Hotel Opening Q2 2016 Opportunity Fund II assets based in Australia, and adopting these key learnings Status Operational across its first hotel fund – Fund I. NABERS 4.5-Stars* Figure 2: Pro-invest’s Hotel Portfolio* Energy Rating NABERS Water 4.5-Stars* Rating *Held 4.5-stars rating for 3 consecutive years running. Located in the heart of the major commercial precinct of North Ryde Sydney, the Sydney-based asset marks Australia’s first Holiday Inn Express hotel and Pro- invest Group’s first operational hotel. Holiday Inn Express Sydney Macquarie Park offers a smart choice for value *As of August 2020. Several sites are currently undergoing conscious business and leisure travellers, due diligence for site acquisition under the strategy to further roll-out Fund II across the ANZ. with the hotel’s business model strongly ingrained in operating ‘smart’ – offering All of Pro-invest’s hotels have an in-room guests everything they need and nothing energy management system which turns they don’t. This philosophy extends to the the power off when unoccupied through the hotel’s sustainability design, considerations

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for furniture, fixtures and equipment, and Acquisition Q3 2016 operation. Date

Hotel Opening Q1 2019

Status Operational

NABERS 5-Stars Energy Rating NABERS Water Under Assessment* Rating *At time of writing. The Holiday Inn Express Newcastle is Holiday Inn Express Sydney Macquarie Park, Exterior, Actual. situated in the vibrant harbour city of Newcastle NSW. The hotel features 170 The hotel has achieved a post-construction well-designed rooms and is positioned in 4.5-Star rating for both Energy and Water the up-coming western end of Newcastle NABERS ratings for three consecutive city, close to Newcastle University, years. Newcastle CBD, Honeysuckle dining and Through continuous efforts to enhance the business precinct, Newcastle beach and asset’s efficiency, the hotel reduced its foreshore and Marketown Shopping Centre. carbon footprint by nearly 64 tonnes of CO2- e in 12 months. Over the 12-month period, the GHG emissions reduction for scopes 1, 2 and 3 declined by 6% meanwhile GHG emissions for scope 1, 2 and 3 per room experienced a 7% reduction year-on-year. Further, water consumption during the period reduced by 9%, while water consumption per room too underwent a 9% reduction. Measurabl analytics demonstrate a usage reduction total of nearly 22%, Holiday Inn Express Newcastle, Great Room, Actual. translating to a water expense savings of over 10% which equates to approximately Counting down the months till the hotel A$5,000. reached eligibility to lodge for a NABERS rating, Holiday Inn Express Newcastle – Holiday Inn Express Newcastle, Pro-invest Group’s fourth operational hotel NSW, Australia – actively monitored its utility consumption Hotel Specifications: and abided by IHG’s Green Engage system to reduce energy and water consumption Newcastle, NSW, Location Australia wherever feasible, incorporating a range of the suggested sustainability initiatives, both Select Service Hotel Property Type during design and operation. From a design Plus Retail (c. 260m2) perspective, the hotel was designed with Ground floor, 2 Levels Floors Above-grade Parking, 5 efficiency and environmental Levels of Hotel consciousness wherever feasible.

Hotel Rooms 170 Holiday Inn Express Newcastle achieving a 5-star NABERS rating marks a momentous milestone for Pro-invest Group, as the

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Group pushes for a 4.5-star baseline ‘come in and eat/drink/stay awhile’ in a NABERS rating and targets 5-stars across millennial embrace of co-mingling. the estate. The structural elements make this building Holiday Inn Express Brisbane – along with all of Pro-invest’s other Holiday Central, QLD, Australia Inn Express hotels - impressive and help create a carbon footprint lighter than those Hotel Specifications: of many of its rivals. Spring Hill, Brisbane, Location QLD, Australia In-room temperature is dictated by a heating/cooling split system which is Property Type Select Service Hotel individually controlled but also uses an energy management system directed 2 Basement Car Park Floors Levels, Plus 12 through sensors when guest-free.

Hotel Rooms 226 Holiday Inn Express Adelaide City Centre, SA, Australia Acquisition Q3 2014 Date Hotel Specifications: Location Adelaide, SA, Australia Hotel Opening Q2 2017 Select Service Hotel Property Type Status Operational Plus Retail (c. 540m2) Ground Floor, Plus 9 NABERS Floors 4.5-Stars Levels Energy Rating NABERS Water Hotel Rooms 245 4.5-Stars Rating Acquisition Q2 2015 Date

Hotel Opening Q3 2017

Status Operational

NABERS 4.5-Stars with 3% Energy Rating GreenPower NABERS Water 4.5-Stars Rating

Holiday Inn Express Brisbane Central, Great Room, Actual. The hotel is located on the edge of Brisbane’s CBD – a short walk to Brisbane River, Eagle Street and Fortitude Valley. Located only a short stroll to the city’s best retail, entertainment, dining and leisure hubs, the hotel is centrally located and easily accessible via a host of transportations.

The Brisbane hotel comprises 226 Holiday Inn Express Adelaide City Centre, Guest Room, Actual. comfortable, tech-friendly rooms along with vibrant enticing public spaces which say

5 Holiday Inn Express Hotels NABERS Ratings

Featuring 245 well-designed rooms Status Operational equipped with only the necessities, Holiday Inn Express Adelaide City Centre is situated Designed to Achieve 5- NABERS Stars Upon >12 months in the vibrant north-west quarter of Energy Rating Adelaide’s central business district. The Operation* Designed to Achieve 4.5- great location provides easy accessibility to NABERS Water Stars Upon >12 months Rating Adelaide Oval, Adelaide Convention Operation* Centre, the new Royal Adelaide Hospital, *With trading impact of COVID-19, realising hotel rating may the SA Health and Medical Research exceed the initial anticipated 12-month period post hotel opening. Institute, University of South Australia, Adelaide Casino and Rundle Mall shopping. Designed to achieve a 5-Star NABERS Energy Rating once >12 months During the preliminary assessments done in operational, Holiday Inn Express Melbourne preparation for the Adelaide hotel to lodge Southbank is located within the Southbank for a NABERS Energy and Water rating, it precinct, directly south of Melbourne’s CBD. was identified that the hotel fell slightly The 345-room hotel includes meeting and below the 4.5-star mark criteria at a 2- conference rooms, gym facilities and a food decimal rating of 4.49-stars under NABERS and beverage offering. Energy. With NABERS rating down to the nearest 0.5-star increment, Pro-invest in collaboration with its outsourced sustainability consultant decided to acquire c. 3% of GreenPower to give the hotel a little “boost” to 4.5-stars. Since identifying that the hotel needed a bit more efficiency enhancements, Pro-invest has engaged two leading ESD institutions, Cundall and CIM. The organisations are Holiday Inn Express Melbourne Southbank, Great Room & well-versed with Pro-invest Group’s assets Balcony, Actual. and continue to provide expert advice for the Group to enhance its hotels’ energy Pro-invest, together with the guidance of efficiency. Clean Energy Finance Corporation (CEFC) - a specialist clean energy financier, Holiday Inn Express Melbourne investing with commercial rigour to increase Southbank, VIC, Australia the flow of finance into renewable energy, energy efficiency and low emissions Hotel Specifications: technologies - incorporated a range of Melbourne, VIC, Location initiatives into the Melbourne Southbank Australia hotel to boost the initial targeted 4.5-star Select Service Hotel NABERS Energy rating to 5-stars. Property Type Plus Retail (550m2) & 2 Office (4,500m ) Subsequently, the design changes are Floors 22 Floors expected to translate into a c. 25% drop in the hotel’s energy use, delivering Hotel Rooms 345 substantial energy savings, providing ongoing benefits for the hotel, its carbon- Acquisition conscious guests and the environment. Q4 2016 Date The baseline used to calculate the decline Hotel Opening Q4 2019 in forecasted energy consumption for Holiday Inn Express Melbourne Southbank

6 Holiday Inn Express Hotels NABERS Ratings is the energy consumption for the portfolio’s ▪ Inclusion of Photovoltaic System for the first asset, Holiday Inn Express Sydney roof top which involves roof mounted Macquarie Park. photovoltaic cells generating clean and renewable energy consumed by hotel’s The involvement of CEFC marked the daily energy demand and reducing the institution’s first investment in the hotel overall fossil fuel-based energy sector. With CEFC investing at an early consumption. stage in the Melbourne Southbank project, ▪ Guestroom Energy Management the design was positively influenced to System to turn the power off to lights assist in delivering a range of cost-effective and Air-conditioning when rooms are energy performance improvements to unoccupied, while also integrating achieve a 5-star NABERS rating. Ultimately, dimming controls to manage light output the investment will provide developers and from LED lighting. operators with practical insights into how they can lift their energy performance and ▪ Hotel lifts improved through installation of regenerative lift drives rather than achieve long-term cost benefits by investing standard lift motors, enabling the lift to in proven clean energy technologies. recycle energy during operation. The below are key initiative examples which were implemented to uplift Melbourne How NABERS Can Help You Southbank’s NABERS Energy rating by 0.5 If you are interested in finding out more stars to 5-stars. about the NABERS rating tool for hotels, get in touch! ▪ Installation of high performance IGU and Glazing which is an upgrade of Find out about what you need to prepare for building glazing properties above a rating, how to find an assessor and get industry standard to reduce the total answers to any other questions you may solar heat gain of the building. By doing have. so, the energy required to condition guestrooms and public areas will be Visit www.nabers.gov.au, send an email to noticeably reduced, resulting in the [email protected] or phone reduction of energy consumption of the (02) 9995 5000 and ask for the NABERS four-pipe chilled water system which is team. the highest energy demanding system in the hotel.

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