Sustainable real estate: What investors need to know

Property investors and building owners are increasingly taking measures to make properties more sustainable. Not only is this a good investment to future-proof properties, but it also contributes to achieving the goals of the Paris Climate Agreement. Are you considering making your real estate more sustainable? In this blog, we advise you on your journey to achieving sustainable buildings.

What is sustainable real estate?

Sustainable property refers to buildings that are intended to be used efficiently over a long period of time. It suggests that the property has been built or renovated to be able to save energy, reduce CO₂ emissions and preferably generate its own energy. Sustainable buildings are constructed with respect for the environment and climate, taking resource reduction and quality of use into account.

Why is sustainable real estate important?

The existing built environment is responsible for a large share of CO₂ emissions worldwide (39%). If we want to comply with the Paris Climate Agreement, decarbonisation strategies are required. Furthermore, the European Union’s updated Energy Performance of Buildings Directive (EPBD), which came into effect on 28 May 2024, includes upgrades to the regulatory framework designed to drive renovations across member states: every member state must gradually introduce Minimum Energy Performance Standards (MEPS) for non-residential buildings to renovate 16% of the worst-performing buildings by 2030 and 26% by 2033.

The 6 advantages of sustainable real estate

Are you considering making your property more sustainable? A good choice. After all, making property more sustainable has many advantages.

1. Future-proof

Green, or real estate that has little impact on the environment, is safer, healthier and more efficient. By using innovative applications and methods, a sustainable property can also become energy self-sufficient: solar panels, energy-efficient appliances, smart energy meters and applications that provide building performance data all play a role in achieving sustainable buildings that can keep up with the times.

2. Higher ROI

Making property more sustainable requires an investment, but one that is worth it. Depending on the type of measure, you will save energy in your building in the long run. Sustainable property can also request a 10% higher rent, according to market research [1]. Moreover, if you make optimal use of the possible financial tools (see point 4), you can increase your ROI in various ways.

3. Higher building value

An unsustainable building loses heat, uses gas and is usually poorly insulated. By making your property more sustainable, not only will the building be converted into a green building, but it will also have much higher value for its occupants and future users. The building becomes worth around 10% more and retains that value for longer [1].

4. Subsidies and tax benefits

Various financial incentives are available for making property more sustainable. You can take advantage of these if you want to make your property more sustainable. Read which options for making buildings more sustainable are available in the UK >

5. Good for the climate

The energy you do not use will still be the greenest energy. That is why sustainable real estate, in which current-day innovations are applied, is best for the climate. The building does not waste or lose energy, generates the energy it needs (is self-sufficient), does not use gas or grey electricity and is a zero carbon building.

6. Healthy buildings, healthy people

A sustainable building in which the indoor climate is pleasant all year round, and in which people can perform well, increases the comfort and well-being of the people who use it. Employees will perform better, experience less stress and be ill less often – which in turn saves costs.

Energy transition, ESG and real estate

Within the built environment, ESG goals are increasingly playing an important role. ESG stands for Environmental, Social and Governance. Customers are becoming more critical and aware, paying attention to issues such as climate, health, energy consumption, corporate responsibility and availability of raw materials. Examples include using as many local (preferably sustainable) raw materials as possible and disposing of waste in the most environmentally friendly way. Good ESG reporting is a next step in the further development of the energy transition and becomes more important when making real estate more sustainable.

How can you make your property portfolio more sustainable?

Making your real estate more sustainable does not have to be an immediate large expense. You can do it step by step, first seeing how each measure contributes.

Increasing sustainability often starts with gaining insight into where energy is leaking and can therefore be saved, especially in buildings that are several decades old. There are tools available for this, such as Priva Energy Insight by ErbisOne. A next step could be to install systems that focus on the energy efficiency of a building and can be tailored to the user's needs. You can also consider generating renewable energy via solar panels, for example.

Make your property investment sustainable with Priva

Realising sustainable real estate is a long-term process. That is why it is a good idea to start with steps that already yield results in the short term. With ecoBuilding, you can save energy costs while improving comfort within a short turn-around time. Thanks to AI and digital twin technology, the tool predicts how much energy is needed to achieve an optimal indoor climate without wastage.

Would you like to know more about ecoBuilding? Feel free to contact us or request a free demo. We are happy to assist you with more information to help you achieve sustainable real estate. 

Sources

[1] https://www.priva.com/blog/buildings/sustainable-green-buildings-offices