Home' The Channel Magazine : Nov Dec 2009 Contents 30 National Newsagent Nov/Dec 2009
The shopping centre Rules usually
forms part of the lease. This gives centre
management the power to introduce new
eco-friendly rules that retailers (and their
employees) must obey that were unknown
or not contemplated when the lease was
first entered into. Retailers must now
look extra carefully for potential hidden
costs so they can budget correctly, both
at feasibility stage and during the life of
the lease. For example, will the landlord
insist upon all retailers committing to
eco-friendly packaging criteria? Will
all wrapping be required to be bio-
degradable? Does the lease compel you to
attend meetings to discuss your carbon,
packaging or eco-operational footprint?
What happens if a customer complains
you aren t green enough? Is there an
adequate dispute resolution clause? Does
the lease compel you to adhere to a strict
waste sorting scheme? How much will
that cost in labour? Are there penalties
for non-compliance? Are expensive, more
energy efficient light globes required
when replaced? Are there plans to buy
green power and distribute that to the
tenants and will that be a profit centre for
the landlord? Can bike racks be used by
employees? Are your returns a problem for
THE COLOUR OF YOUR MONEY
The lease is a long term document and
potentially things can change over time.
The landlord may decide to upgrade
existing facilities to green the building and
make it more efficient. It will want to build
in flexibility into the lease that could cost
retailers more than they bargained for.
Hang on a minute, if there s cost savings,
won t they be passed to the tenants
with reduced operating expenses? Not
necessarily. Capital costs cannot usually
be passed onto tenants and therein lays a
paradox a disincentive not to green the
building. Pay back periods such as solar
voltaic systems (solar panels generating
electricity, potentially to feed back to
the grid for a credit on electricity used)
systems are a long term investment,
taking years to recoup savings. Energy
efficient cooling and heat exchange
systems normally require upgrades in
other areas such as ways to control solar
radiation, potentially altering the base
building envelope. These are expensive
capital intensive works that potentially
may lead to landlords not doing them
or finding ways for tenants to pay for
them potentially with higher occupancy
charges. The questions keep coming.
Who gets the carbon credit, the landlord
or the retailers who ultimately pay for the
improvement? Will the tenants be charged
a carbon tax auditing fee? The list of issues
is considerable. The take home message
is to address all issues before the lease is
signed, write down any conversations with
the person leasing you the shop and take
extensive notes during lease discussions
if these questions arise. Get sound leasing
advice, preferably from experienced people.
Not all solicitors have the expertise to deal
with these emerging green issues.
Currently, most retail leases do not
match the landlord s repair and maintain
obligation to a standard or recycle first
concept. That will change in the future.
Most leases specify new materials in any
store refurbishment and do not set shared
or unilateral environmental objectives
or contemplate smart metering. But all
that is around the corner. Already some
leases give the landlord the ability to
control electricity metered to retailer s
premises. Some shopping centres are now
on green power. Greenfield sites such as
GPT s brand new Rouse Hill Town Centre
is setting new standards for eco-friendly
shopping environments. And that s just the
The one thing about virtually every
aspect of retail is that change is constant.
And it will soon start with the green retail
lease adding a further layer of complexity.
Are you prepared?
Stephen Spring is a retail lease expert at
Australian Retail Lease Management. He is
also a retail policy advisor for the Council of
Small Business Organisations of Australia
(COSBOA). Contact him on (02) 9968 4775
or at www.retaillease.com.au.
many newsagencies located in shopping centres need to
consider the greening process
PROFITABLE FOR ALL
According to a recent TIME poll, 82% of
Americans said they have consciously
supported local or neighbourhood
businesses this year; more than six in 10
have bought an organic product in the
past six months; 40% said they have
purchased a product in 2009 because
they liked the social or political values of
the company that produced it.
An article entitled The Responsibility
Revolution (21 Sept 2009) charts the
rise of ethical consumerism in the US,
noting that it is profitable for everyone.
The statistics in Australia appear to be
Recent research conducted by the
Mobius Group from Melbourne suggests
that LOHAS (Lifestyle of Health and
Sustainability), a major driver in the green
economy, is worth around $15 billion
(up 25% from the previous year) and is
expected to reach $22 billion in 2010.
The need to rethink our personal
and business strategies to embrace
environmental sustainability invades
every aspect of our lives, from sorting the
rubbish to buying locally and installing
energy efficient light bulbs.
Even shopping centres have green
strategies and Stephen Spring outlines
these on page 28.
If saving energy can save money then it
is good for both business and the earth.
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