Regular contributor to our LinkedIn discussion group and participant at the previous Symposiums in London and Frankfurt, Ioannis Orfanos, Director - Green Value Associates, writes about quantifying added value creation in sustainable real estate investments.
Most investors today would not develop a new commercial building in a major city without attaching some green credentials to it. Τhis proves an underlying value differential in green labeled and more energy efficient properties. However, this value differential is not evident at present as it has not appropriately quantified due to lack (so far) of reliable data.
Likewise, defining and quantifying the impact of sustainable initiatives in existing commercial real estate matters if we are to overcome the slow progress of green retrofits in current building stock. It is undeniable according also to a recent analysis report in UK that the economic factor of value creation is simultaneously...
The last few months have been a busy period in terms of planning for our second Frankfurt Symposium which will take place on the 5th November 2014. Our Managing Director and Founder John Pike discusses how the programme is shaping up and what you can expect from the Symposium throughout 2014.
Our programme for the 2014 Frankfurt 40 Percent Symposium is developing very quickly. Already confirmed are some of the most senior industry speakers from across Europe making this a truly international event, you can take a look at the programme here. We are also partnered, as last year, by the RICS, GreenRating, DGNB and GRESB. Additionally this year ZIA have agreed to support us.
We are also proud to be sponsored by Gold sponsor ES EnviroSustain, Silver sponsors IPD and DLA Piper and Bronze sponsors DIFNI and OPG.
This year we will be covering the following important and often critical aspects of sustainability in real estate:
The title statement is the conclusion of Jon Lovell, Director, Deloitte Real Estate Sustainability Services and certainly is a sentiment which is greatly supported by the discussions taking place at both our London and Frankfurt Symposia over the last three years. You can find the full blog article authored by Jon Lovell below or you can read it as originally published here.
The sustainability imperative for commercial real estate
There is no question that sustainability is now a fundamental commercial real estate concern affecting long-term value generation and short-term profitability, especially in the context of mature markets such as the United States, Western Europe, and Australia. The combined demands of occupiers, investors, and regulators are such that tangible benefits can be derived from embedding sustainability into the full investment process, with a range of property value fundamentals — rental growth, yield premiums, total occupancy costs...
The world renowned architect Ken Shuttleworth has turned his face against glass skyscrapers in a BBC article titled: “Could the era of glass skyscrapers be over”.
At the next 40 Percent Symposium in Frankfurt on 5th November 2014 we will be discussing “ Developing for the future…sustainability of design” . To be a part of this debate you can book your place now at at our exclusive Frankfurt Symposium click here.
40 Percent Symposium Founder and MD John Pike writes:
"Last year, at both our London and Frankfurt Symposia, delegates were invited to participate in a debate on including sustainability as a measure of value. In London William Newsom of Savills said that the lick of paint at reversion was no longer an option whilst James Bretten of RBS spoke of sustainability increasingly being seen as an obsolescence factor in cash flows. In Frankfurt Dr David Lorenz identified the trend from the most recent RICS guidance putting pressure on clients to supply environmental performance data to mitigate obsolescence concerns. Herman Horster of BNP Paribas talked of environmental issues being seen as a risk factor by tenants.
The RICS have now issued a guidance note which recognises that valuation is not just about historical evidence of say past rents and yields. The guidance note says “ Whilst valuers should reflect markets not lead them, they should be aware of sustainability features and the...
40 Percent Symposium Founder and MD John Pike responds to the 'Building Zero Carbon' report.
"This report by the UK-GBC Industry Task Force makes the case for zero carbon new non domestic buildings’ targets. It references the innovation, economic and export opportunities that such targets will support. At the 40 Percent Symposia we increasingly focus on the value advantages of sustainability in terms of buildings in use and investment values. Germany has Energie Wende and one of the questions we will be asking at the 2014 Frankfurt Symposium is “what is the response of the Real Estate Industry to initiatives such as this?” At the moment behaviour is largely driven by regulation and legislation. By identifying real economic benefits we will rapidly move beyond this to voluntary environmental behaviour dictated by economics. The Task Force’s report is a step in that direction."
We will be discussing this topic in more detail at our Frankfurt Symposium in November 2014...
John Pike writes: "The International Property Measurement Standard is an important initiative supported by the RICS. Not only in the context of the consistent valuation of commercial property around the globe but also because it will give a real opportunity for the measurement of sustainability to be put on a credible basis. I well remember the arguments, when I was co-chair of the International Sustainability Alliance, around the international board table as to what was the most appropriate method of measurement in order to calculate benchmarks. It is surprising how much heat can be generated by an argument on gross internal floor areas versus gross external floor areas. And heat is what we are all trying to avoid!
So I welcome this initiative, the International Property Management Standard, and wish the RICS and its partners well."
To read the draft document click here.
We are delighted to host a guest blog by Matt Ellis from Measurabl regarding sustainability reporting.
Matt writes: "With most large commercial real estate companies now reporting to one sustainability standard or another, the industry is starting to hits its stride on sustainability reporting. The next wave of reporters - smaller REITS, private firms and their suppliers - has taken note and is starting to test the waters. There are good and bad sides to this.
The good is REITs (Real Estate Investment Trusts) are increasingly disclosing their sustainability data and improving performance. According to REIT.com, HCP increased its CDP disclosure score to 97 up from 77 and its performance score up to an “A-” from a “D” after just two years of reporting. The company attributes the higher disclosure scores to having vendors and suppliers more involved, implementing safety policies, putting sustainability information out on tenant websites, and introducing an innovative competition...
40 Percent Symposium Founder and Managing Director John Pike writes:
"Real estate investors and occupiers today demand a much more sophisticated approach to sustainable reporting than was the case even 5 years ago.
When I first started to work with the BRE on creating an environmental benchmarking club, the International Sustainability Alliance, the industry was in its infancy and reporting restricted to maybe 12 or so key benchmarks.
Since then we have come a long way with the focus increasingly on the environmental impact of entire estates. Whilst much of the early impetus came from legislation, particularly 2002 Energy Performance of Buildings Directive, there is an increasing body of evidence from organisations such as CDP to suggest an improved financial performance from companies that embrace a sustainable approach.
The arguments for reporting are well argued in a recent report by PE International which explores how sustainable platforms can be used to drive annual reporting of...
The first annual Frankfurt 40 Percent Symposium was held on the 14th November at the splendid Steigenberger Frankfurter Hof.
Founded in 2011 in London where it is described as “the most relevant and useful sustainability conference in the calendar” the opportunity to bring the conference to Frankfurt, Germany’s international finance centre was not to be missed. Over 50 delegates listened to expert speakers from industry, real estate investment and academia on the impact of sustainability as it affects commercial property strategic decisions.
An additional and unparalleled benefit of the 40 Percent Symposium was the opportunity to network with peers and the conference speakers in an informal atmosphere; a point commented on by many of the delegates at Frankfurt.
Supported by an Advisory Board of leading industry experts comprising Christoph Wildgruber, Head of Sustainability at Allianz Real Estate, Michael Determann Managing director of Aberdeen Asset Management Germany; Peter Helfrich...