CEE to adopt LEED as green building standards duke it out

EUROPE - Central and Eastern European (CEE) markets are more likely to adopt the US LEED sustainable building standard as overseas investors pour into the region - despite a survey showing Poland lagging behind the rest of Europe on sustainable building.

Thomas Beyerle, head of social responsibility and research at IVG, told IP Real Estate that European sustainable building labels would consolidate from more than 90 to around six over the next few years as the requirements for certification became "consistent and comparable".

The European sustainable building market is currently polarised between major international investors demanding LEED standardisation and local companies preferring the BREEAM or - especially in France - a domestic alternative.

Although the UK's BREEAM is the standard most used in Europe, for international investors, "it's LEED or not-LEED", said Beyerle.

"The main issue is that a German standard makes sense from a German standpoint, but it's not understood elsewhere," he said.

He also pointed to "six-figure" costs associated with certification.

His comments came as IVG published a survey of 85 European listed property companies that showed significantly more developed sustainable building markets in the Nordics than in southern Europe and Poland.

The survey also revealed demand coming not from regulators but from capital markets.
Beyerle told IP Real Estate: "The regulation isn't really that developed. The market is being driven by pressure from investors looking for solutions to survival in the future." 

At the same time, he confirmed a finding observed elsewhere in the industry that demand is coming primarily from investors.

Of the 85 companies surveyed by IVG, 90% noted strong demand from shareholders, compared with 65% from tenants.

"Green building is a relatively small segment - around 10% in each country," he said.

"There is a lack of available product, but there is pressure from investors."
Beyerle also forecast that sustainable refurbishment would move up the agenda in the next 2-4 years.