Office relocation: best practice leasing

What is a green lease?

A green lease is a lease between the landlord and tenant that aims to minimise environmental impacts from use and operation of the building. It is different to conventional leases because it incorporates ecologically sustainable development (ESD) principles and establishes a dialogue between owner, managers and tenants for iterative improvements over time.

Why negotiate for environmental leases?

Leasing premises is a slow cycle of more than five years. Many sustainability and efficiency measures move much more quickly than this. Using sustainability principles in a lease provides a framework for both the landlord and tenant to iteratively improve energy efficiency, set sustainability goals and maintain their results. It provides clear documentation for what the two parties are seeking to achieve and the roles and responsibilities of both. It also introduces a form of accountability and, subject to mutual agreement, some real liability if targets are not met.

How to approach green leasing

Organisations can get the most of out a green lease when contemplating office relocation and negotiation with a new landlord, but they can also be entered by existing tenants. Green leases have five key elements:
  • Target environmental measurement standards
  • Energy management plan
  • Mechanism for administering green leases,  e.g. a building management committee
  • Metering and data reporting
  • Dispute resolution process

See the Sydney Better Buildings Partnership Leasing Lifecycle Tool for step-by-step assistance.


Green leases do not necessarily cost any more than regular leases. This type of leases may require behaviour changes from the tenants, which some can see as a cost.  However, the positive outcomes of changes and the operational savings gained should outweigh any management costs and perceived inconvenience. For example, modifying set temperature controls give greater comfort, while adjusting equipment settings reduces waste and saves on electricity costs.  

In the videos below, Esther Bailey, City Switch National Program Manager explains the benefits of green leases and Paul Bannister, Managing Director of Exergy, explains how these five elements fit together.



Related Resources

  • Slide Deck: Best practice leasing event

    Slides from the CitySwitch event held for signatories in Sydney: Sharing the love - Tenant and Landlord Guide to Happiness providing insight to help tenants get the lease that makes sustainability happen.

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  • The Tenant & Landlords Guide to Happiness: ebook

    This e-book explores opportunities for improved collaboration and sustainable outcomes between commercial tenants and landlords. Produced by The Fifth Estate in partnership with Sydney's Better Buildings Partnership, it reveals opportunities for an improved leasing process.

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  • A guide to office building quality

    A Property Council of Australia document providing tools for assessing office building quality in new and existing buildings. The tools provide a guide to parameters that typically influence building quality, offering a voluntary, market based approach.

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  • Fact Sheet: Why choose a high performing building

    A business case scenario showing how best practice indoor office environments can create savings above those from energy bills. A good building makes healthy and happy staff and improves their productivity.

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  • Green Leasing Page - Australasian Procurement and Construction Council

    The National Green Leasing Policy sets out the principles for a collaborative relationship between  government tenants and building owners. This set of 18 Fact Sheets is produced by the Australasian Procurement and Construction Council.

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  • Green Lease Lifecycle Tool

    A comprehensive online tool which outlines each step of the leasing process, providing information on who to engage, when to engage them and importantly the key expectations, issues and resources to consider along the way. Produced by the Better Buildings Partnership.

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  • Green Lease Guides

    Tenants Guide to Green Leases (19 pages) and a Handbook for leasing advisors to incorporate green lease provisions (60 pages) created by the Australian government.

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  • CBD Lighting Assessment Guidance

    A tenancy lighting assessment is an important component of a Building Energy Efficiency Certificate (BEEC) required under the Commercial Building Disclosure (CBD) Program. The guides and forms required are available here. 

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  • Sustainable Melbourne Fund

    A fund for improving Melbourne buildings established by Melbourne City Council. The Fund provides up to 100% loan finance for building retrofit projects or for innovative technologies that deliver wider environmental benefits.

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