Green Buildings in Germany Remain in Demand

Alongside the transport sector, the construction and building sector is one of the largest emitters of greenhouse gases and is therefore one of the areas where the greatest efforts are needed to achieve sustainability targets.

Most recently, however, the investment volume in so-called “green buildings” was slightly down at €11.2 billion, as a market report by BNP Paribas Real Estate shows.

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Institutional investors increasingly focusing on green buildings

A look at the market reveals clear trends in terms of players, location, and type of use of the property, as well as the type of certification.

Institutional investors spent 60 percent of their investment volume on green buildings in 2022, with insurance companies and pension funds among them investing the most “green” at around 70 percent, while asset managers put only 29 percent of their total investment volume into such certified properties.

Green office buildings in particular demand, logistics market dynamic

In 2022, the A-market remained the main venue for green buildings, with a share of 80 percent. The frontrunner was Berlin with an investment volume of EUR 3.2 billion. It was followed by Frankfurt with €1.7 billion and Munich with €1.6 billion. Green office buildings remain particularly in demand. They accounted for 65 percent of all green buildings and are now certified as green in almost every second office investment.

The biggest driver of this development remains internationally active companies. The logistics market is also proving particularly dynamic. 27 percent of all investments in this real estate class were green-licensed in 2022. A year earlier, the figure was 10 percent lower. As a result, their relative share of all green building investments also rose to 13.2 percent.

Hermann Horster explained the fact that properties certified according to BREEAM, DGNB or LEED criteria are in such high demand, even though they are not per se congruent with the ESG taxonomy, with the regulatory uncertainty that many investors are currently still facing. Horster is Head of Sustainability at BNP Paribas Real Estate and points out that regulatory ESG claims are still not clear enough. “The good old green building certificate is maturing into a hidden champion,” he said, launching it as a must-have.

Appropriate, because with the EU Energy Performance of Buildings Directive (EPBD) currently under revision and the extension of emissions trading to commercial buildings envisaged under the European Green Deal, it is certain that ESG compliance and sustainability will continue to be driving factors in the real estate market.

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(Featured image by AnteKante via Pixabay)

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First published in dpn, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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