Sustainability indicators such as energy performance have moved up the agenda in the real estate sector over the last few years, particularly for lenders and investors for whom is it increasingly becoming an integral part of their portfolios and decision-making processes.
Sustainability indicators such as energy performance have moved up the agenda in the real estate sector over the last few years, particularly for lenders and investors for whom is it increasingly becoming an integral part of their portfolios and decision-making processes.
Empirical studies consistently show that buildings which exhibit ‘green features’ generate higher value in the form of increased rental rates, higher sale prices, increased occupancy rates, lower operating expenses and faster marketing times.
For RICS members too, sustainability has become embedded in their daily professional routines: indeed, the RICS Red Book now specifically lists sustainability as a factor that valuers need to take into account when performing valuations and risk assessments for their clients. But despite the growing body of evidence to document the positive relationship between sustainability and value, locally relevant data and market evidence which would help the work of the valuation professional are still largely non-existent.
This was one of the key conclusions of a National Real Estate Valuation Roundtable held in London in May. Organised by RenoValue, an EU Intelligent Energy Europe funded project launched at end-March, the event brought together 25 UK experts in green building, investment, finance and property valuation.
The RenoValue project is led by a consortium comprising RICS, the Karlsruhe Institute of Technology, Swedish construction and development company Skanska, property adviser CBRE, Dutch valuation firm Troostwijk, the Polish National Energy Conservation Agency, the Politecnico of Milan and Business Solutions Europa, a Brussels-based consultancy. The purpose of the roundtable was to monitor and assess market trends regarding energy performance and value.
Its findings will help form the results of the two-year project which aims to develop targeted training material for practising valuation professionals on how to incorporate green credentials into property valuations.
The roundtable participants agreed that the way in which property-related data is collected, organised, accessed and used along the value chain is a key issue to be addressed in the future by both policymakers and industry.
Ursula Hartenberger, global head of sustainability at RICS and chair of the RenoValue European Valuation Steering Group who moderated the event, noted: ‘Access to reliable data – regardless of whether this relates to sustainability performance or simple building characteristics – is crucial for professional valuers in order to provide the client with robust advice so that he or she can take an informed investment decision. One of the key messages that came out of the roundtable was that in the UK we are, in fact, currently faced with a two-tier access to data.’
While professional valuers in larger firms will usually be able to source information and data in-house, those operating within SMEs or as single practitioners are finding this far more challenging and need to be much more creative and intuitive than their peers, she said, adding: ‘The training material that will be developed through the RenoValue project will need to take this into consideration.’
The London event was the first in a series of national valuation roundtables to be held in seven EU countries (the UK, Germany, Poland, Italy, Belgium, the Netherlands and Sweden) to assess valuation professionals and valuation users’ needs regarding the integration of energy efficiency and renewable energy features into daily valuation practices.
To find out more about the project, please follow the twitter feed: @RenoValueEU