'Economic argument for sustainability stronger than ever'

Occupiers, not investors or brokers, are driving moves towards a sustainable real estate industry, according to Bernd Knobloch, CEO of German bank EuroHypo. 'Investors will do what occupiers are doing,' he said during the inaugural Sustainable Cities conference organised by the Financial Times and the Urban Land Institute in London on Monday.

Knobloch said the climate for sustainable development and investment had changed significantly in the past 12 months. 'Rising energy prices mean that it also makes more economic sense.' There must always be an economic argument for sustainable investment, he added. 'There is more focus on environmental responsibility in the commercial real estate sector than in residential. That is the big upside of the commercial sector, it takes a long-term view which is easier to achieve than in the residential sector.'

Knobloch made a plea for further standardisation of certification methods. 'Every government has its own certification system and legislation. The problem is that they are not comparable at all. We really have to work on that.' Valuation will also become more important in the next five to 10 years than it is now, he noted. 'What is clearly needed is an acceptable system on how to value sustainable buildings.'

Mixed-use complexes are the greatest energy savers, said Gerald Hines, founder and CEO of US-based development company Hines. 'The building must also be aesthetically pleasing, have the right restaurants and hotels and be a place where people want to be and stay.' Boosting public awareness is vital in this context, he added. 'By showing good, successful exanples, others will repeat those types of programmes.'

One of the problems facing the industry at present is that it doesn't know which way to go, said Liz Peace, chief executive of the British Property Federation. The need to address the existing building stock will be even more costly, she noted. Peace put forward a proposal for a package of measures: 'We need a coherent government framework and measurement system, better data on the costs, a package of support measures like fiscal incentives and enough of the right sort of leadership.'