Sustainability in commercial real estate transactions – a growing interest by investors
29.8.18

Share
  • 1
    Share

Recently sustainability has become a way to create and maintain competitive edge in real estate investment. Big investors have realized being responsible and environment friendly doesn’t have to be only a burden to carry. They have realized it can be been seen as on opportunity. “Anyone who wants to keep operating successfully in the market in the future needs to act responsibly today – toward society and the environment, employees and clients,” says Dr Marcelo Cajias, Associate Director Sustainability at PATRIZIA Immobilien AG (Patrizia, 2018).

Sustainability

Growing emphasis in sustainability in commercial real estate transactions

The grown interest into sustainability has led to more emphasis on these factors during the decision making in investment decision. Several sources in commercial real estate transactions forecast that the factors related to environment and sustainability will be seen to double their weighting in the near future.

On the other hand the investors already see the so called green properties as a more secure investment opportunity. They are prepared to accept a return of as much as 0.65 percentage points less in return for greater security (LaSalle Investment Management, 2017).

How to understand sustainability in real estate?

Based on a great work of organizations such as Green Building Council the industry has learned to understand better the importance of this field. Further the industry has learned different practices to manage and communicate sustainability in real estate. The most recognized tools are various certificates of which few are globally recognized.

The various tools help to property owners focus their actions and investments to run buildings more environment friendly and also to concentrate better on the user experience of the building itself. The large portfolio owners need to take into account different aspects of responsible governance. All this helps the industry to maintain and develop better future for the build environment.

How to understand sustainability when selling and buying real estate?

At the same time when taking the sustainability more serious the large property owners ask for more standardised definitions and explicit target values (Patrizia, 2018). The most known certificates globally are LEED and BREEAM to communicate and understand the property’s environmental footprint. Another well known certificate is WELL which adds the approach of the users well being. Any of these are very well recognized and the vast majority of the real estate professionals know to appreciate the property being certified.

Outside of the industry professionals also the growing number of building users, the current and prospected tenants, are aware of these and are merely interested in what kind of buildings they are going to spend their work days.

Communication needs to be understandable

All this leads to a growing demand to simplify the communication in the decision making between the industry decision makers. The complexity behind may be growing but how it is being communicated between the parties can still be made more understandable.

For example you can still hear sometimes comments from institutional owners that when exploring different investment opportunities the sustainability factors are not clearly communicated. The problem may as simple as the seller may have not thought about it.

To avoid these mistakes in future and support the better communication between the buyer and seller RealX.pro will support the sellers to communicate the various sustainability related factors in an easy and understandable way to the potential buyers. Learn more from www.realx.pro

Picture: Communicating the sustainability is made very straightforward on RealX.pro -platform

Sustainability in CRE transactions

Writers:
Hannu Käki, CEO, RealX.pro, tel. +358 400 642 170
Mikko Nousiainen, CEO, Green Building Council Finland, tel. +358 40 525 8440‬

 

RealX.pro

RealX.pro is a closed real estate sales platform for the Capital Markets segment serving the brokers, investors and banks. RealX.pro is developed by Proptech.pro, a growth company from Helsinki, Finland.
www.realx.pro

 

Green Building Council Finland

The World Green Building Council is a global network of Green Building Councils which is transforming the places we live, work, play, heal and learn. We believe green buildings can and must be at the centre of our lives. Our changing climate means we must reshape the way we grow and build, enabling people to thrive both today and tomorrow. We take action – championing local and global leadership, and empowering our community to drive change. Together, we are greater than the sum of our parts, and commit to green buildings for everyone, everywhere.
http://www.worldgbc.org


Share
  • 1
    Share
Tags: , , , , , , ,

Category: