CASE STUDY 4 Toyota Altona Research and Development Facility Innovative financing and incentive structures: While there is increasing evidence around the business case for decarbonizing real estate, sustainable development often faces increased upfront costs and other financial barriers. Certain asset types, like offices, have increasingly shown evidence of green premiums, however, sustainability is still not reflected in valuations broadly. Innovative financing mechanisms, such as land value capture and green bonds, can help recover some of the capital costs associated with green projects. Policy- makers should consider incentives and public- private partnerships to accelerate the net-zero transition. Adaptive reuse of assets is an effective way to avoid the additional embodied carbon costs of new construction and promote circularity by reusing existing structures. JLL worked with Toyota to repurpose an existing manufacturing plant in Melbourne, Australia, into a centre for excellence to support research, development and education. Extensive collaboration across stakeholder groups was necessary to get input from occupiers on how to best activate a space that once produced over two million Camry engines. To ensure full stakeholder buy-in, JLL’s approach followed the Japanese custom of “nemawashi”, which Toyota defines as “the first step in the decision-making process. It is the sharing of information about the decisions that will be made to involve all employees in the process. During the nemawashi, the company is seeking the opinion of the employees about the decision”.12The first phase involved refurbishing the 65,000-square- foot head office to support collaboration and innovation. The second phase was the transformation of the manufacturing facility into a state-of-the-art redevelopment facility to support vehicle design and provide testing studios, training rooms, a mock sales dealership, an auditorium and a bistro. The challenge was to undergo the transformation without disrupting business activities and ensure effective cost planning and budget alignment. Strict sustainability requirements were adhered to in order to achieve a Five Star Green Star target. Source: JLL Reimagining Real Estate: A Framework for the Future 25

Reimagining Real Estate 2024