Introduction

"Property Management remains a cornerstone of our efforts to reduce
our environmental footprint and to enhance the social fabric and
economic prosperity of communities where we operate. Our emphasis
now, more than ever, is on long-term thinking coupled with rigorous
measurement and targeting of environmental performance at
individual properties."  Peter Best, Head of Asset Management

2006 has been a year of consolidation for our sustainability activities in Property Management. As in previous years, we have continued to roll out ISO 14001 (2004) certification across the managed portfolio, securing three certifications for key managed offices, with a further 11 properties set to achieve certification in early 2007. It is our long-term aim to achieve ISO 14001 certification for all managed properties.

Coupled with IS0 14001, we continue to work with TEAM Bureau to develop an environmental performance monitoring system for all managed properties. The project has been challenging at times, but we remain committed to ultimately delivering an industry leading system that assists property managers in intelligent monitoring and targeting of our environmental performance.

The Scottish and Southern Climate Change Levy exempt electricity contract negotiated by Buying Force during 2005 was also implemented across the UK managed portfolio during 2006. It is our aim to continue the expansion of this contract across yet more managed properties over time. If we assumed that the carbon emissions associated with this green electricity contract were zero, we could confirm that it has resulted in the diversion of 22,226 tonnes of CO₂ (representing 26% of the entire portfolio’s CO₂ emissions for 2006). However, given recent controversies over the effectiveness of schemes such as the EU Emissions Trading Scheme, and carbon dioxide conversion factors of different energy sources in the UK, we have chosen to report on the carbon emissions of this ‘green’ energy using current Government recommended carbon conversion factors for ‘brown’ electricity in our carbon dioxide graphs, albeit distinguishing between carbon dioxide averted and carbon dioxide emitted from our energy usage.

We have also set a target to reduce overall CO₂ emissions by 9% on 2006 levels, by 2012. We have set this target in line with the Government’s own commitments under the draft Climate Change Bill, setting a 60% reduction target for CO₂ emissions by 2050. We will report annually on our progress against this ambitious target. Further details of our Property Management targets for 2007/08 can be found here.

Nevertheless, energy consumption remains a significant challenge to Property Management, as we have witnessed increases on 2005 figures in all three groupings of our managed properties ('shopping centres', 'significant managed offices' and 'whole portfolio'). Whilst the increases can be explained by various operational factors, it will be important going forward to strive for operational efficiencies, and seek continuously to improve resource management as a whole, looking at energy, materials, water and waste in particular.

During 2006, PRUPIM participated alongside its peers and other property sector companies in the British Property Federation/Carbon Trust funded work stream to develop a scheme by which the operational energy performance of properties could be assessed, benchmarked and improved. The key output from our work in 2006 has been the Landlord's Energy Statement (LES) which will be trialled extensively by the UK property sector during 2007/08 as part of the LES-TER project (Landlord's Energy Statement - Tenant's Energy Review). We are delighted to support this cornerstone of the national energy strategy.

In terms of meeting our customers’ service expectations, the DTZ Helpdesk continues to deliver useful intelligence both to our property managers (managed offices only) and at a corporate level. Monitoring contractor performance through the Helpdesk enables us to target areas for improvement and as a result increases our responsiveness to customer concerns.

Engaging with tenants on sustainability issues is also becoming a key consideration for the further improvement of our collective performance, and an area of focus for our Improver Portfolio, which will see us trial more in-depth engagement with key tenants. It is our aim to apply the learning from this pilot across the portfolio. The case study on GreenPark which details our engagements with tenants on ISO 14001 certification demonstrates what can be achieved through active management and tenant engagement at one individual property.

Further details of our property management performance against a range of key performance indicators can also be found here.