Investment in Green Buildings

Investment in Green Buildings

Thomas Hartwig

Published
04/2023 by Thomas Hartwig

Here is a brief update on the topic of building and sustainability.

In recent months, we have reported in various posts on the topic of green buildings. Now, research by BNP Paribas Real Estate and last weekend’s report in Handelsblatt confirms the growing interest in investing in buildings constructed to the highest sustainability standards.

In 2022, the share of transactions in certified properties increased by 4.9% year-on-year to a total of 30.6%. In office properties, a peak value of 46.2 % was reached, so that almost every second newly constructed office building is a green building. In the logistics sector, the share rose from 16.5 % (2021) to 27 % (2022).

The demand for sustainable real estate is particularly high among institutional investors, such as insurance companies and pension funds as well as open-ended funds. The focus is on the so-called A-cities Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart.

Green buildings are properties in which attention is paid to a maximum reduction of CO2 emissions in the planning, design, construction, operation and also the subsequent deconstruction (reuse of materials). This is assessed in so-called life cycle assessments. Among other things, EPDs (Environmental Product Declarations) for the classification of building products form the basis.

The technical development of green buildings will continue to be dynamic. As already reported, example projects have shown that even simple changes in structural design, away from conventional construction methods, can lead to additional CO2 savings of up to 30%.

With the growing importance of sustainable real estate, the pressure is increasing to create more incentives for this as well, since this savings potential is currently not yet taken into account in the ESG criteria.