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6 Value Case Results

The value case results are summarised in the following cost–benefit analysis tables in terms of capital cost investment, hard- and soft-cost savings, simple paybacks and nine-year net present values, based on the assumptions given in section 5. Table 11 provides a cost–benefit analysis for scenario 1: 4-, 5- and 6-star, and 4-star with energy focus, fit-outs of new 4- and 5-star rated base buildings. Table 12 provides a cost–benefit analysis for scenario 2: 4-, 5- and 6-star, and 4-star with energy focus, fit-outs of an upgraded minimum 4-star rated existing base building. Table 13 provides a cost–benefit analysis for Scenario 3: 4-, 5- and 6-star, and 4-star with energy focus, fit-outs of an existing unrated base building.

Table 11: Cost–benefit analysis for scenario 1: 4-, 5- and 6-star, and 4-star with energy focus, fit-outs of new 4- and 5-star rated base buildings

Green star NZ fit-out rating Average capital cost premium
$/m² NLA 		Annual energy cost saving
$/m² NLA 		Annual water cost saving
$/m² NLA 		Total hard cost savings
$/m² NLA 		Hard cost savings simple payback
(years) 		Hard cost savings
9 year NPV
$/m² NLA 		Hard cost savings
IRR
% 		Annual soft cost savings
$/m² NLA 		Total hard and soft cost savings
$/m² NLA 		Hard and soft cost savings simple payback
(years) 		Hard and soft cost savings
9 year NPV
$/m² NLA
4-star 9.4 6.66 0.2 6.86 1.4 42 78 11.25 18.11 0.5 125
5-star 32.8 7.74 0.2 7.94 4.1 28 23 18 25.94 1.3 160
6-star 46.7 9.36 0.2 9.56 4.9 26 18 18 27.56 1.7 159
4-star with energy focus 17.6 7.74 0.2 7.94 2.2 42 48 11.25 19.19 0.9 125

Notes:

NLA (net lettable area) = the area for which a tenant could be charged for occupancy under a lease.

Simple payback = the amount of time it will take to recover the initial cost premium, ignoring the time value of money, inflation and the life of the investment.

IRR (internal rate of return) = the discount rate with an NPV of 0 over a period of time.

NPV (net present value) = the stream of costs and benefits over a period, converted into an equivalent value today.

Table 12: Cost–benefit analysis for scenario 2: 4-, 5- and 6-star, and 4-star with energy focus, fit-outs of upgraded minimum 4-star rated existing base building

Green star NZ fit-out rating Average capital cost premium
$/m² NLA 		Annual energy cost saving
$/m² NLA 		Annual water cost saving
$/m² NLA 		Total hard cost savings
$/m² NLA 		Hard cost savings simple payback (years) Hard cost savings
9 year NPV
$/m² NLA 		Hard cost savings
IRR
% 		Annual soft cost savings
$/m²NLA 		Total hard and soft cost savings
$/m² NLA 		Hard and soft cost savings simple payback
(years) 		Hard and soft cost savings
9 year NPV
$/m² NLA
4-star 9.4 6.66 0.2 6.86 1.4 42 78 11.25 18.11 0.5 125
5-star N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
6-star N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
4-star with energy focus 17.6 7.74 0.2 7.94 2.2 42 48 11.25 19.19 0.9 125

Notes:

NLA (net lettable area) = the area for which a tenant could be charged for occupancy under a lease.

Simple payback = the amount of time it will take to recover the initial cost premium, ignoring the time value of money, inflation and the life of the investment.

IRR (internal rate of return) = the discount rate with an NPV of 0 over a period of time.

NPV (net present value) = the stream of costs and benefits over a period, converted into an equivalent value today.

N/A = not applicable.

Table 13: Cost–benefit analysis for scenario 3: 4-, 5- and 6-star, and 4-star with energy, focus fit-outs of existing unrated base building

Green star NZ fit-out rating Capital cost premium
$/m² NLA 		Annual energy cost saving
$/m² NLA 		Annual water cost saving
$/m² NLA 		Total hard cost savings
$/m² NLA 		Hard cost savings simple payback
(years) 		Hard cost savings
9 year NPV
$/m² NLA 		Hard cost savings IRR
% 		Annual soft cost savings
$/m² NLA 		Total hard and soft cost savings
$/m² NLA 		Hard and soft cost savings simple payback (years) Hard and soft cost savings
9 year NPV
$/m² NLA
4-star 13.45 6.66 0.2 6.86 2 38 54 11.25 18.11 0.7 121
5-star N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
6-star N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
4-star with energy focus 21.8 7.74 0.2 7.94 2.7 38 38 11.25 19.19 1.1 121

Notes:

NLA (net lettable area) = the area for which a tenant could be charged for occupancy under a lease.

Simple payback = the amount of time it will take to recover the initial cost premium, ignoring the time value of money, inflation and the life of the investment.

IRR (internal rate of return) = the discount rate with an NPV of 0 over a period of time.

NPV (net present value) = the stream of costs and benefits over a period, converted into an equivalent value today.

 

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