Sustainability is a must, but idealism alone won't cut it. Making sufficient returns on your portfolio is necessary. How does a green energy system affect the value of your real estate? Experts give their views in this article. What is worthwhile and what is a waste of money? Through a number of calculation examples we show when sustainability is profitable or not. In short, as a property owner you want to know.
What makes real estate truly sustainable?
"Real estate is inherently sustainable because it is developed for the long term. Therefore, sustainable particularly stands for 'sustainability,'" says Dirk Brounen. He believes the focus of sustainable real estate is too often on saving energy. According to him, it is about creating value-retaining real estate that can be adapted to the wishes and possibilities of the time.
First calculate, then preserve
The question you need to ask yourself: what can I adjust to increase the value of my property? It usually turns out that a green energy system - such as a solar roof - contributes to this. To see what sustainability can do for your real estate portfolio, we have created a number of calculation examples. See which example is most similar to your situation and quickly find out whether sustainability is worthwhile for you.
Green buildings are easier to finance. And here's why.
Banks are weighing sustainability more and more heavily when evaluating a real estate financing application. Corporate lawyer Dr. D.W. Aertsen and sustainability expert S. Bordewijk explain why. First, because sustainability is enforced by laws and regulations. Second, because banks themselves are increasingly engaging in Corporate Social Responsibility. But the third and most important reason is financial. Because (credit) risks are increasingly linked to unsustainable real estate and climate change. If real estate is less sustainable, risks of depreciation and reduced lettability increase. That is why banks offer lower interest rates if a building is sustainable and therefore future-proof. In other words: discount for sustainability.
"Sustainable buildings are financed at lower interest rates" Sustainability expert S. Bordewijk
Sustainability performance reflected in appraisal value
Before a bank proceeds with financing, an appraisal is made. In this, sustainability performance and the related rental value are increasingly taken into account. For example, the Dutch Green Building Council Foundation has drafted a sustainability paragraph for appraisal reports. In practice, the renowned appraisers of Dynamis Taxaties Nederland always include sustainability factors in their valuation of real estate. In short, a sustainable property is valued higher than a comparable property without sustainability measures.
Dirk Brounen, professor of Real Estate Economics at Tilburg University, believes that real estate sustainability too often focuses only on energy conservation. It's all about creating real estate that retains its value. Real estate that can move with the times and that does not lag behind when changes are needed.
Green energy systems increase the value of your real estate portfolio
Dirk Brounen's statement, "sustainable properties increase rental value," is also evidenced in the research by CBRE Group. Having sustainability certification increases value. Among other things, it leads to less vacancy and higher rents. The best-known example is the BREEAM certificate (Building Research Establishment Environmental Assessment Method). But a scan such as the ESG scan also provides insight into the sustainable impact of your property and can thus contribute to a higher rental value.
Demand for sustainability works its way down the chain
Society is demanding more and more when it comes to sustainability. It is market forces in which the demand for sustainability permeates the entire chain: customers demand suppliers to be sustainable, so companies make the same demands of landlords. As a provider of sustainable real estate, this makes you of added value.