Through our investment, asset and property management, forward funded development and corporate activities we look to minimise the environmental impact of our business.
PHP is committed to the principles of continuous improvement in managing environmental issues, including the reduction of pollution and emissions, the proper management and monitoring of waste, and compliance with environmental legislation and codes of practice.
Environmental and sustainability performance are integral elements of PHP’s approach to the acquisition of existing and funding of new primary healthcare buildings. We use detailed assessments of each location, looking at building efficiency and performance, enhanced service provision for the community and support for wider healthcare infrastructure.
We undertake detailed environmental and building surveys to assess physical environmental risks for each investment, including flooding, to ensure the risk is avoided or appropriate prevention measures are developed (see our TCFD disclosures on page 48).
During 2022 we began applying our net zero and ESG commitments to our investment activities, in particular engaging with developers and asset owners to challenge current standards and leverage our influence. We have engaged with developers to raise awareness of net zero standards and included net zero or energy related conditions in our offers.
Energy efficiency is also considered through the due diligence process and all acquisitions are required to have an EPC of C or better, or be capable of remedial action to achieve the required rating, and associated costs are now integrated into our appraisals. We also seek to include green lease clauses at acquisition where feasible.
All acquisitions completed in the year had a minimum EPC rating of C and are capable of achieving an EPC rating of at least a B when next refurbished.
of the portfolio has an EPC rating of “A-C”
We are committed to creating best-in-class primary care centres, focusing on the future needs of our occupiers and thereby ensuring we are creating sustainable buildings for the long term. We invest in the portfolio of properties to generate enduring occupier and patient appeal, which provides opportunities to improve rental values, the security and longevity of income, and the quality of assets. This is a key route for PHP to deliver energy efficiency improvements and to introduce low or zero carbon measures for our occupiers and their patients.
Asset and property management will play a key role in achieving our NZC target of having a NZC portfolio by 2040 with interim commitments for all properties to have an EPC rating of at least B and NZC asset management by 2030 and an 80% reduction in portfolio emissions by 2035 via targeted improvements to buildings and occupier engagement.
During 2022 we completed ten asset management refurbishment projects, improving EPC ratings to B for all except two which achieved A ratings. We have a further ten refurbishment projects on site or committed, which include energy efficiency upgrades, installation of roof-mounted solar, air source heat pumps and thermal efficiency upgrades. All these projects have either achieved or are on track to achieve BREEAM Very Good certification for refurbishment and fit-out. We also agreed 33 new leases during the year, with all including Green Lease clauses.
During the year, we also completed design and planning work for two net zero ready refurbishments which we expect to be on site during 2023 and we will also begin to address embodied carbon in asset management projects.
Working with our occupiers is essential to improving the performance of buildings and during 2022 our property management team engaged with all of our tenants, carrying out over 1,000 site visits at which issues, including energy and utilities, are discussed.
With rising energy costs, energy security concerns and the need to reduce building emissions, we began analysing the portfolio for the potential roll-out of larger scale onsite solar power, for buildings where PHP procures energy and to enable tenants to make use of solar where they procure their own energy.
projects completed during 2022
projects expected to commence over the next three years
Data sourced from Annual Report 2022
PHP, together with its development partners, are committed to promoting the highest possible standards of environmental and social sustainability when designing and constructing new assets. Requirements are also in place for our development partners and contractors to ensure the implementation of responsible property development practices.
Construction has now commenced on PHP’s first NZC development at Croft, West Sussex. We also continue to work on our pipeline of carefully selected new developments which are being designed, built and capable of being operated as net zero carbon buildings.
We also started to work with our development partners in Ireland to integrate embodied carbon as a key requirement in the future.
of the newly completed assets delivered in 2022 held an EPC with a rating of B or better