EV Charging in Commercial Property: Crucial Considerations for Landlords & Tenants

The face of Australian transport is evolving fast. The Electric Vehicle Council estimates that Australia will need to support an EV fleet of one million vehicles by 2027 to reach global 2050 Net Zero targets.

This drives one major question to the forefront of EV adoption: Do landlords and occupiers have the right EV charging infrastructure in their office buildings, retail centres and industrial warehouses to service their tenants and clients?

Neil Glozier, CBRE Pacific's Former Director of Energy and Sustainability, and Natasha Mulcahy, CBRE’s Pacific Director of ESG Consulting, know exactly what clients are demanding, as well as the challenges they’re facing when integrating EV infrastructure into their commercial spaces.

“We are working with some of the leading organisations, both from a landlord perspective and an occupier perspective on a daily basis across Asia Pacific,” says Mulcahy.

“CBRE has a 2040 Net Zero target, Scope 3 emission targets for 2035, and interim targets including 100 percent electrification of our fleet. This means that we’re decarbonising the spaces we manage on behalf of landlords and occupiers worldwide. If our clients don't succeed in their decarbonisation journey, then neither do we.”

Why EV is being fast tracked

EV technology isn’t new in the automotive landscape. It was first proposed during the 1970s oil crisis and again during the smog predicament in the 1990s. The first mass-produced hybrid electric vehicle debuted in 1997, but it arrived at a time when petrol prices were at an all-time low.

“Adoption of EVs at that time was always going to be slow when consumers didn't have a real driver as fuel was cheap. We have that now as petrol prices skyrocket and EVs are nearing parity with internal combustion vehicles,” explains Mulcahy.

A previous CBRE Viewpoint report suggested that Australia’s biggest shopping centres were much better positioned than the leading office towers at supporting a projected influx of electric vehicles. It highlighted a retail EV charging station penetration rate of 78% in major capitals, compared to an office penetration rate of just 20%.

Glozier notes that less than 1% of car bays in Australian office buildings are available for EV charging, which needs to ramp up to 5% by 2030 and would require fast deployment.

“You need a plan now to understand what needs to happen between now and 2030 because it’s only six years away. We are at the base of a steep curve that's poised for exponential growth.”

As a result, EV charging is now starting to gain local traction with office landlords becoming increasingly proactive in supporting tenants with EV infrastructure.

“We are currently working with a client that is the leader in this space, as far as we can see. They do a great job of trying to support their tenants across a large office portfolio. Of those buildings, 34% had some EV charging infrastructure before we even started – well above that 20% average.

“To date, we’ve completed feasibility studies on 19% of those buildings and we’ve determined that 44% of the car bays are available for EV charging based on electrical and fire considerations. Based on current demand we expect that 23% of those bays to have EVCI installed within 12 months.”

Real estate requisites for EV adoption

Only 20% of Australian commercial buildings have EV charging infrastructure in place, meaning the eventual rollout will have a major impact on the local commercial real estate sector.

The immediate questions being asked are:

• How much power is available at site to support EV charging
• Is it a public or private tenant infrastructure requirement
• Who pays for the charging at the location?

Mulcahy and Glozier say that the conversations they are having with landlords, office occupiers and major retailers across the country currently revolves around three crucial considerations:

Landlords then need to address the physical infrastructure required and its impact on the existing building and electrical network.

“Fire safety has been a hot topic for the past couple of years with multiple stakeholders involved in application of fire safety measures,” says Glozier. “It is a dynamic, moving landscape where we have found that outside of landlords, tenants, and our Fire Engineering partners’ building insurers have expectations that need to be addressed in EVCI development.”

According to Glozier, safety and compliance needs to sit highest on commercial property EV journey.

“We want people in our buildings to be safe, and then we can apply the scalable solutions,” he says.

When it comes to infrastructure, he emphasises the importance of deploying rapidly across a property portfolio once specific key parameters are known. Aspects such as when an EV fleet is secured and when employees are using the space. Even before this, landlords and tenants should have a framework, data and an understanding of what infrastructure their building can support.

“What is the boundary? How many chargers can we have before we have to start considering load management and then significant building electrical upgrades? It’s not just the electric vehicle charging infrastructure; there's other electrification projects to be considered.

“The key considerations are a foundational framework, understanding your assets, and the consistent design and delivery of a program of works.”

The current demand for EV charging isn’t recognised within the rents being charged on commercial property. Landlords are primarily providing EV charging as a premium amenity or end-of-trip facility as that’s often how it’s perceived.

“Is there a commercial driver there for the landlords? Not at the moment,” says Mulcahy.

“There is usually a lack of historical utilisation data to develop really robust financial models. And if landlords go to an external model or a third-party provider, one of the major concerns is around long lock in contracts.

“Are landlords making the right decision? Are they handing over too much control to an EV charging company within their building? These uncertainties around choosing the right model can inevitably delay landlord decisions.”

Mulcahy believes clients are still trying to understand what technological changes and innovations will occur in the future so that they can install the right technology.

“The biggest fear is that we invest heavily into charging infrastructure that might be technologically obsolete before reaching a break-even point.”

Choosing an incorrect strategy could also potentially draw negative feedback from tenants and customers. One area of futureproofing that Glozier is keen to highlight is the flexibility that software can provide landlords and building tenants.

“In the case of EV implementation into the office space, there will be questions like is it a public charger or a private charger? Is it just for employees or for a fleet? That use case might change so the flexibility of software can come in here.”

CBRE’s EV advantage

Where others see challenges, CBRE sees opportunities. Managing 15,000 buildings globally means we have the right expertise to help clients find the right commercial model or determine demand for their EV infrastructure.

• Scalable and Integrated solutions - we leverage data at scale and apply global knowledge to local markets
• End-to-end solutions of discovery, specification and deployment
• Technical specialists in EVCI coupled with decades of real estate experience
• Tailored solutions across property sectors and EV charging technologies
• The use of Deepki, CBRE’s proprietary ESG data collection platform designed to help property owners reach sustainability goals across energy use, waste water and social impact