Water

Absolute Water Consumption
Consistent Portfolio Water Consumption
Industry Benchmarking
Offices

Absolute Water Consumption

Absolute landlord purchased water (m³)

Total Hermes portfolio water consumption by sub-sector for 2007 (m³)

We are only responsible for the procurement of water in the CLO, RUKO and SC sub-sectors.

Rate of change between 2006 and 2007 of absolute and relative water consumption by principal sub-sectors⁴

Overall there has been a 6.2% increase in absolute consumption and a 15.6% increase in relative consumption between 2006 and 2007.

The significant increase in relative consumption at our RUKO portfolio can be explained by the fact that we sold Saltley Business Park in 2007. Saltley was part of the RUKO portfolio and had a very large floor area comparative to its water consumption. This significantly affected the relative consumption for that sub-sector. However we have experienced an absolute water consumption increase of 36.08% in 2007 and thus have made water efficiency a key focus for 2008.

Our SC portfolio saw an absolute rise of 7.5% overall, partly due to the addition of a number of shopping centres into the programme in 2007. Conversely to the energy findings, the sale of Princes Square did not greatly affect total water consumption due to the amount used.

Our CLO portfolio saw an absolute drop in consumption of 3.1%, partly due to water efficiency measures and partly to sales in this sub-sector.

4 The methodology for calculating the change in absolute water consumption by sub-sector and building efficiency by sub-sector is the same as was used for the equivalent CO2 calculations (see energy section).

Consistent Portfolio Water Consumption
There were 33 properties that provided consistent water consumption data from 1^st January 2006 to 31^st December 2007. This is the consistent portfolio that we have measured for progression against our internal water target of a 5% year on year reduction (see targets section).

Landlord purchased water for a consistent portfolio of 33 properties

Change in absolute water consumption for a consistent portfolio of 33 properties between 2006 and 2007 by sub-sector.

We have seen a 3.19% increase in water consumption across our consistent portfolio between 2006 and 2007. We have therefore not met our target of a 5% reduction.

Our shopping centre portfolio, which accounts for 30% of total portfolio consumption, made savings of 6.3%, largely due to water efficiency measures implemented at thecentre:mk, which delivered an 18.5% reduction.

Both our office portfolios saw an increase in water consumption. The 4.9% increase in our CLO portfolio is particularly significant as it accounts for 60% of the total.

Given this unsatisfactory performance, we have made water a management focus for our PM’s for 2008/9, and we are working hard to identify problems and potential opportunities to reduce our water consumption, particularly in the CLO and RUKO portfolios.

Industry Benchmarking
The Upstream Sustainability Benchmarking Service for Shopping Centres and Offices also allows us to benchmark our portfolio for water consumption.

Shopping centres

Water intensity of the Hermes shopping centre portfolio compared to peers (m³/visitor)⁵

There has been a slight increase of 2% in intensity between 2006 and 2007 for our shopping centres. This rise is directly attributable to new centres being benchmarked in the survey, which have not yet implemented a number of ‘easy wins’ in terms of consumption reduction. We will be pushing for these to be done in the coming months.

Some centres, however, managed to make significant savings over the period, with thecentre:mk in particular, our largest single consumer of water, reducing its intensity by 18.5%, making it one of the lowest intensity users of our entire portfolio. This saving was almost solely a result of more efficient maintenance.

5 Landlord only water

Offices

Water intensity of the Hermes office portfolio compared to peers (m³/work station)⁷

Water intensity has increased year on year in our office portfolio, with a jump of 7% between 2006 and 2007. There have, however, been some notable improvements from some properties, including St Vincent Street and Prospect House (Jones Lang LaSalle) both of which managed to achieve savings of over 15%.

We are working with our PM’s to ensure the reasons for any increases are identified and action is taken. Some measures have already been implemented, such as a new water management system at Leatherhead House (see RPI Centres of Excellence) which we estimate will result in a 96% saving in 12 months. Initiatives such as this will be encouraged at all our offices and we expect to see savings in water in the coming years.

7 Landlord & tenant water

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