500 Collins St case study

500 Collins St

When the Kador Group purchased 500 Collins in 2002, their intention was to undertake a comprehensive upgrade of the building with sustainability as its cornerstone. The result is the first refurbishment project in Australia to receive a five star Green Star design rating from the Green Building Council of Australia. This outcome has shown the market what can be done to make an older building sustainable.

The 28-storey building was constructed in the early 1970s and hadn't been refurbished in many years.

When planning for the project began the Environmentally Sustainable Design (ESD) consultant was one of the first people to be engaged, and Kador states that the outcomes have been the result of a 'top down' commitment to sustainability - from the company's board all the way down to the contractors used on the project.

Commercial principles haven't been ignored either. Rather than emptying the building, the refurbishment has been carried out floor-by-floor, and a tenant occupancy rate of approximately 80% has been maintained through the majority of the project. Lease income has been maintained and tenants have been retained.

In addition to reducing energy, water and waste, the project also has a goal of making 500 Collins a 'good place for business to do business'.Achieving good indoor environment quality (IEQ) has been vital.

A pre and post-occupancy evaluation study carried out on two tenants who moved from original space to newly refurbished space found that staff productivity increased significantly. This Productivity Study was carried out in conjunction with Sustainability Victoria.

This project has been motivated by Kador's desire to give something back to the industry by demonstrating that sustainability and commercial success can go hand in hand in refurbishment projects.

Sustainable design

Air conditioning

Chilled beam

One of the major initiatives of the refurbishment is the installation of a chilled beam air conditioning system.

The simple principle behind chilled beam technology is that cooling is distributed by way of chilled water pipes to chilled beams located in the ceiling space. Hot air in the occupied space rises through a perforated ceiling. It then makes contact with the chilled water, and the cold air drops down into the occupied space.

The benefits of the chilled beam system are that it uses less energy than a traditional system, and also that it creates less drafts and a better indoor environment than other traditional systems.

Both active and passive chilled beams were used at 500 Collins. Active chilled beams have some air supplied to them through ducts at ceiling level, and are able to handle greater cooling loads than passive beams. The active beams are used in the perimeter zones of the building near the façade where the heat loads are typically highest, whereas the passive beams are used in the internal zone.

Outside air is supplied to each floor through ducts at a rate 50% above that required by Australian Standards to improve indoor environment quality.

Water

Solar collectors supply 25% of the building's domestic hot water. The system has been installed despite limited space being available on the roof for the panels. The commercial payback period of the system is around 14 years which would generally be considered to be non-commercial; however the cost was minimal in relation to the total project, and solar hot water systems significantly minimise the environmental impact of heating water in a building.

Waterless urinals are another feature of the building that was uncommon at the time of design. Water efficient toilets and flow restrictors further reduce water consumption. Rainwater collection tanks have been included and are used for irrigation and cleaning purposes.

Water consumption in the building's cooling towers has been reduced through the application of a modified water treatment program.

Waste management

Solar panels

During the refurbishment process, the project recycled 80% of construction waste, including existing fitout and other materials.

Operational waste has also been addressed. 500 Collins was the first multi-tenant building in Australia to achieve Waste Wise certification. The floor plans are designed to include provision for separated waste systems, with waste collection services contracted to support this.Finally, a worm farm in its basement processes food waste.

Other initiatives

Other features of the building that reduce energy consumption and improve indoor environment quality include the use of energy efficient T5 lighting, the selection of low volatile organic compound (VOC) carpets, paints and other materials, and a reduction in the amount of PVC used in the fit-out.

Mark Ross, Kador's Manager of Investment Projects, points out that the building's design didn't only rely on 'big ticket items' to achieve its sustainable outcomes. Sustainability has instead been achieved through the integration of many smaller items.

Challenges overcome

As the first project of its type, 500 Collins had a number of challenges to overcome.

First, the refurbishment was designed before the release of rating tools such as Green Star and NABERS. There was no design manual to reference or specific credits to achieve - the designers and consultants relied on their own initiative.

Building services

Setting up the chilled beam system also provided some challenges. One of the largest of these was checking the building's façade for leakage. If humid outside air leaks into the space, condensation can form around the chilled beams.

In order to test the façade, part of a floor was partitioned and sealed then pressurised to ascertain the extent of air leakage through the façade. The building was found to be relatively air-tight.

The decision to undertake the project in an occupied building presented a number of technical challenges.One of these challenges was that the building's existing services (air conditioning, water, power, etc) needed to continue operating on the unrefurbished floors throughout the project.

Running two air conditioning systems simultaneously for up to 5 years, for example, required considerable ingenuity on the part of the consultants and builder.

Noise issues

Noise proved to be an issue for those tenants remaining in the building during early stages of the refurbishment. A number of measures were taken to rectify this, including undertaking demolition works outside of business hours.

Old carpets were also left on the floors for as long as possible, reducing the construction noise transmitted to other floors. This carpet was later recycled into car mats.

Facility and lease management

Harry Hullin, the building's facility manager, is cited as one of the major reasons for the success in retaining the majority of the existing tenants. In addition to contributing his knowledge of the building, he has kept tenants informed throughout the refurbishment and also helped with the commissioning process. His intimate knowledge of the new technologies used in the fit-out has also been vital to the ongoing performance of the building.

Egan Smith, of ECS Property Group, the building's managing agent, has been closely involved in the management process. When Kador purchased the building, there were 63 tenants, all with different lease periods and expiry dates. These tenancies had to be managed and negotiated as different floors were refurbished.

One testament to the success of the project and the management of the process is the high tenant retention rate, with the majority of tenants vacating old floors and moving into the newly refurbished ones.

Results and conclusions

As discussed previously, one of the major goals of the project was to make 500 Collins a 'good place for business to do business'. Productivity studies and employee satisfaction surveys indicate that Kador achieved its goal.

An independent productivity study was completed by Business Outlook and Evaluation, in conjunction with Sustainability Victoria. Qualitative and quantitative analysis of two tenants (before and after their move to refurbished floors) revealed an overall productivity increase of 12% on the refurbished floors.

One organisation reported a 44% reduction in the average monthly cost of sick leave. Another rganisation has reported an increase in its billings ratio, despite a 12% decline in average monthly hours worked. The same firm also reported improvements in staff typing speed and accuracy.

Staff reported a drop in fatigue levels of up to 26% in the new floors, and cold and flu symptoms are reported to have dropped by as much as 24% in some of the businesses surveyed.

Staff wellbeing results related to Indoor Environmental Quality improvements - improvements resulting from move to refurbished floor.

Symptoms affecting productivity Tenant one Tenant two
Headache 7% reduction 20% reduction
Cold and flu 21% reduction 24% reduction
Fatigue 26% reduction 16% reduction
Poor concentration 20% reduction 5% reduction

Significant energy and water usage reductions are also expected when the project is completed. At the time of writing (September 2008) there are still five floors left to be refurbished, meaning operational energy savings can't be measured accurately as yet.

Modelled energy savings have the building using just 191 MJ/m²/annum- significantly less than the 400 MJ/m²/annum average for a standard office building [1]. Modelled water usage is also 40-50% less than the industry norm.

Energy and carbon emission savings

Standard office building tenancy energy use (centralised mechanical system)1 400 MJ/m2/annum
500 Collins Street predicted energy use 191 MJ/m2/annum
% energy saving 52.25%
500 Collins Street net lettable area (NLA) 25,500 m2 of which 23,870 iscommercial offices
Predicted energy saved 5,123,844 MJ/annum
Predicted greenhouse pollution saved 1723 tonnes CO2/annum

Recycling has improved from 13% to 42%, and the building now recycles around 40 tonnes of paper, 2.4 tonnes of cardboard and 2.4 tonnes of glass, metal and plastics annually.

"From day one, the direction was 'the sky's the limit' so far as ESD ideas were concerned," says Kador's Mark Ross.

"We encouraged our consultants to consider all environmental initiatives. Payback assessment played a part, but it wasn't necessarily the governing factor."

"Industry should look at life cycle cost, not just capital cost," continues Kador director Paul Martin. "We intend to hold the building long term, so it is appropriate the refurbishment design and cost decisions should reflect that philosophy."

"We didn't do this to chase a star rating or back a trend either. A project like this only happens once every 30 or 40 years in a building's life cycle. Get it wrong, and you're stuck. We've positioned ourselves for the future."

Building details Project team
Building name500 Collins ClientKador Group
Address500 Collins Street, Melbourne Project manager and builderBovis Lend Lease
Total floor area (NLA)25,500 m2 ArchitectPeddle Thorp
Number of storeys28 ESD consultantSustainable Built Environments
OccupierMulti-tenant Services engineerUmow Lai and Associates
New or refurbishedRefurbished Structural engineerRobert Bird and Associates
Construction timeProgressive - average of six months for every three floors refurbished Facade engineerConnell Mott Macdonald
Planning consultantsSJB Planning
Building surveyorGardner Group
Independent commissioning agentMurchie Consulting
Quantity surveyorNapier and Blakely / DCWC


1. Based on a survey of 117 existing Melbourne office buildings undertaken by Sustainability Victoria in 2000, the average tenancy office energy use is 400 MJ/m².

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Case study: 500 Collins St