Sustainability and ESG principles have become a prominent part of the conversation in every industry, particularly within construction and property development. It’s a conversation that Agora Estates takes seriously, integrating this ethos within its business model at all levels. With the company working both on rentals and sales, the first step was to set up an internal team of experts, to identify gaps in the organisation’s journey towards sustainability, with the ultimate aim being of ensuring that properties perform well in all metrics of sustainability.
“Early on, we decided that we wanted to go over and above, to ensure a higher standard of ESG compliance, which will translate into properties that offer a better quality of life,” James Zammit, Managing Director of Agora Estates starts off. “We tested out all rentals so we know what grading we fall under, whether it’s A - which is the most energy-efficient rating - or not. Then we follow up according to the results.”
The policy at Agora Estates is to work on aligning all our properties to fall within the A bracket of the EPC,” he says. Receiving an A grading, for example, means that each property consumes less than 50KW per square metre per annum, a threshold that is considered the gold standard of energy efficient properties, adding that all properties on their books in fact include an Energy Performance Certificate (EPC) even when not needed, such as when they are being rented out.
However, the organisation doesn’t stop there, and is currently pursuing other, more stringent, internationally recognised environmental certification on its properties. There are a number of certifications one can try to follow, these include the BREEAM and Leed certification, which are considered the world’s leading science-based certification system for sustainably built environments. The certification takes a holistic approach, evaluating a broad range of criteria that includes species, design, construction and use, and also evaluate a wide range of categories such as energy conservation, waste disposal and air quality.
“Neither BREEAM nor LEED are common in Malta as yet, but Agora Estates is working to ensure that all our properties include these certifications. We’ve appointed an architect who is training to become a LEED certifying specialist,” James says.
It’s refreshing to see a property developer take these steps without any legal obligation. What precipitated this strategy, I ask.
“We truly believe that this is the only way forward for a better quality of life. We’ve been pursuing this strategy for quite a while now, but we only need to look at the extreme weather the world has been suffering from throughout this summer to understand that we really need to take ESG seriously,” James replies.
He acknowledges that, in the past, many developers in Malta were only concerned with the bottom line, which is the cost of developing the property.
“I believe this is now changing. The way I see it, the environmental benefit is the priority but let’s not forget that there are also tangible, business-related benefits to following a sustainable development strategy. Just to give you an idea, the last block that we put on the market received 95% occupancy almost immediately. Even in our most successful projections, we never anticipated this. And this level of success had a lot to do with the fact they’re very efficient properties,” he confides.
Benefits here include very low utility bills and superb installation, which maintains the indoors temperature as constant as possible no matter what weather it is. The blocks include wells that collect water to use around the block. Water waste is recycled appropriately - for example, the water used in showers is recollected and used for the flushing systems.
“You don’t need purified water for the bathroom. All these small details make a huge difference both to the environment and to the actual household bills. So, there’s definitely an additional tangible advantage to choosing to rent or buy grade A certified property,” James explains.
This applies just as strongly within the commercial market, where most corporate organisations also put a strong priority on ESG. if a property doesn’t reach a specific standard, then the relationship will not work. Malta, James says, hasn’t quite caught up with this trend yet.
“In reality, prioritising ESG has helped give us a competitive edge. The current stock on the island is not capable of such certification. But, hopefully, with the new blocks coming up we continue inching closer to making it the norm. Of course, knowing that you’re doing the right thing is what it’s all about, but knowing there’s a bottom-line benefit should also encourage developers to walk down that lane,” he continues.
With residential properties, he says, the process may take a bit longer. This is because the majority of the market is made up of entry-level and first-time buyers who will prioritise affordability. Moreover, the banking system makes it difficult to finance extras.
“If a developer upgrades the property in line with ESG requirements, it becomes difficult to sell. This is why we need cross-collaboration across all sectors to make this work. Banks are thinking in this direction and we’ve already seen the findings. But now we need to implement it and make it possible for first-time buyers to invest in an upgraded property with ESG features,” James says.
He believes that government incentives are the way forward, adding that there are already different schemes offered to existing owners so as to improve the ESG aspect in their own properties. However, the public remains largely unaware of this.
“The recent power cuts may have been a wake up call for everyone too, galvanising us into reducing our direct consumption. But the issue must be approached in a structured manner. Government needs to set up a taskforce dedicated to making this happen, and to educate the public. A strong campaign to highlight it, such as we had for the BCRS machines,” he insists.
James points out that extending incentives to commercial properties would make a whole world of difference, especially in the longer term.
“Commercial properties can be incentivised via tax schemes. Most companies prefer to pay money to improve the property, rather than as tax. The approach would also regenerate business, resulting into another tax generation industry for the government. It would merely be shifting the tax income from one pillar to another, coming full circle. And the environment, and by extension all of us, wins,” he concludes.