CESAR

The consequences of Russia's attack on Ukraine are now evident. Russia's response to the sanctions imposed on it by the global community was to reduce or even suspend the export of gas supplies. Since then, gas and electricity prices have literally exploded. Saving energy is the order of the day - not only for the sake of the environment, but simply to save as much money as possible. To support citizens and the economy in the short term, three relief packages with a total volume of €95 billion have already been launched this year by the Federal Government. The commission of experts it has appointed proposes further relief packages including a gas price cap, which should also provide incentives to save energy. Energy-intensive companies are to be supported with a total of €1.7 billion of relief as well as energy and electricity tax relief. Also on the agenda are short-time working allowances, VAT relief and other business aid. The cost of further assistance is estimated at up to €200 billion.

More than ever, energy costs are being included in the decision-making processes of companies. High energy-efficiency standards such as insulation, geothermal energy, photovoltaics and smart building controls lead to lower - and currently more calculable - consumption.

The construction and commissioning of real estate requires energy. Energy efficiency and cost-saving potential are made measurable and transparent by the certification of buildings. We use CESAR to analyse green buildings in the Big 7 office property markets (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart). In our analysis, we always use the terms ‘certification’ and ‘certified’ to refer to properties which are certified, pre-certified or registered for certification. We have investigated the stock of, and demand for office space in these real estate stronghold markets, but not developments under construction or at the planning stage. We have taken account of all recognised certificates in Germany, i.e. DGNB, LEED, BREEAM and (specifically for Hamburg) the regionally important ‘HafenCity-Siegel’.

The share of certified office space in the total office stock in Germany’s Big 7 real estate markets has grown by 1.5 percentage points to 10.8% over the past 12 months. Much of this growth is due to completions of new-build or refurbishment projects. Frankfurt and Hamburg registered the highest growth with 2.3 percentage points each, due in part to the completions of the new Deka Office Hub in the Lyoner Quartier in Frankfurt, and the BRAMS and ConneXion new-build projects in Hamburg’s Barmbek-Bramfeld and City Centre submarkets.

Frankfurt leads the ranking of green buildings among the Big 7 by some way, with more than a quarter of its office stock of 11.68 million sqm now certified. Düsseldorf and Munich follow with shares of 11% and 10% of their respective stocks.

The demand for certified space is evident from an analysis of office space take-up. Almost one in every five of the 1,934,400 square metres of total space taken up in the Big 7 office markets is certified. Hamburg shows the strongest demand with just under a quarter of the corresponding take-up of 321,100 sqm, closely followed by Munich (23% of 396,300 sqm) and Frankfurt (21% of 207,700 sqm).

Manufacturing was the most active group in terms of demand, leasing 61,500 sqm of space in a green building, or 38% of the total volume of space taken up by the sector (160,100 sqm). Business Services and Banking & Finance were also extremely active in the take-up of certified buildings and have maintained a regular presence in the Top 5 since the survey began.

Analysing the origins of tenants leasing more than 1,000 sqm of space in the first six months of 2022, 29% of the space taken up by foreign companies was in certified buildings. This clearly shows that large companies set particularly high standards when choosing a location. The share of certified space in lettings to German companies was significantly lower at 21%.

The importance of sustainable real estate will continue to grow. Rethinking the way we build and occupy real estate is now more important than ever. Real estate, from its construction (and consumption of resources) to operation, accounts for almost 40% of global carbon emissions. The energy crisis, with its monetary impact on every single utility bill from private households to energy-intensive companies, as well as its still unforeseeable consequences, has reached another milestone in the ‘Go Green’ agenda.