BNP Paribas Real Estate publishes report on green buildings - Green buildings continue on record course with sales of €11.2 billion

The investment volume in certified green buildings in Germany in 2022 remains at a very high level of around € 11.2 billion. Although the volume, like the investment market as a whole, declined slightly in absolute terms compared to the previous year, the relative share of certified assets in the investment market has risen to an absolute record level of 30.6 %. This is the result of an analysis by BNP Paribas Real Estate.

"In a confusing and uncertain situation, the certificate is perceived as a reliable signal for ESG and sustainability. ESG criteria have achieved a very high status in asset management and investment decisions in a short period of time with the new regulatory framework of the EU Taxonomy and Disclosure Regulations," says Hermann Horster, Head of Sustainability at BNP Paribas Real Estate. "However, these regulations are still causing uncertainty rather than clarity for many with regard to the ESG requirements to be met. Some questions were answered with a publication from Brussels in December 2022, but much remains open." For example, the social taxonomy was first brought forward and then postponed in last year's draft. There is a lack of a clear framework for categorising and recognising a mutual fund as an Article 8 or 9 fund. Although certificates such as BREEAM, DGNB or LEED are not congruent with the ESG criteria of the taxonomy, they are seen as a key indication that ESG criteria are taken into account.

Once again, institutional core investors in particular were very active in the green building investment market segment in 2022. While institutional investors had invested between 50 % and 59 % of their investment volume in certified green buildings in 2021, this ratio was over 60 % in 2022. For insurance companies, the share of green investments was even over 72%.

While the relative share of green investments in individual deals was 25.7% in 2021, it had already risen to 30.6% by 2022. This means that while around one in four euros was invested in sustainably certified commercial properties in Germany in 2021, in 2022 almost one in three euros was invested in a sustainable building.

Dynamic development in A-locations, office properties remain the dominant asset class

in 2022, around 80% of the investment volume of certified green buildings was attributable to A-locations. In the three largest investment locations of Berlin, Frankfurt and Munich, the share of sustainable buildings in commercial transactions totalled over 40% in each case. The share of certified office buildings in total investment in the office asset class reached a new high of 46.2% in 2022 (2021: 38% and 2020: 34%). Almost every second euro in this asset class now flows into a certified building. An impressive increase in market share is also recorded for green logistics buildings. 27% of the logistics investment volume flowed into certified properties in 2022. In the previous year, it was only 16.5 %. As in previous years, office properties were once again the most important asset class on the green building investment market. International corporates, which favour certified buildings, continue to be the driving force. There was also a dynamic trend in logistics properties, which significantly increased their relative share to 13.2% compared to the previous year.

Green building certificates are gaining in importance

As in previous years, a significant increase in the number of certifications in Germany was again recorded in 2022. Over 2,800 buildings in Germany are now certified. The analysis of certifications by asset class shows impressively that the relative share of retail in the number of buildings certified nationwide has been declining for several years in a row, while logistics has recently made relative gains. DGNB (1,670) remains the market leader in the area of green building certificates, ahead of BREEAM (660) and LEED (490). BREEAM was able to pull further ahead of LEED thanks to the certification of existing buildings.

One example of a sustainable project for the future is the Ostkreuz Campus in Berlin. In addition to an excellent digital infrastructure, the building also has green outdoor areas that ensure lower emissions and sustainable relaxation for employees at the Ostkreuz Campus.

"While the industry is discussing taxonomy conformity, the categorisation in Article 8 or 9 of the Disclosure Regulation is becoming the key criterion and purchase and divestment decisions are being made accordingly, the good old green building certificate is maturing into a hidden champion. The fact that over 70 % of the investment volume of institutional investors flows into certified properties is proof of this: The green building certificate is now a must-have. However, it is no more and no less than a reliable indication that ESG issues are being taken seriously, as the legal framework continues to represent a significant hurdle. The aforementioned regulations are just the tip of the iceberg," explains Hermann Horster. Since 1 January 2023, the CO2 levy has also applied to commercial uses in Germany, and an emissions trading system for buildings is in preparation in Brussels (expected from 2027). Berlin, on the other hand, wants to tighten up the Building Energy Act (GEG), and a bill to increase energy efficiency (ENEFG), including the refurbishment of the least energy-efficient buildings, is available as a draft bill. The EU is planning something similar with the EPBD (EU Energy Performance of Buildings Directive): Buildings in the deep red zone of the energy performance certificate are to be refurbished to a more energy-efficient level. "The growing importance of ESG and sustainability in the real estate sector is likely to be even more dynamic in the future than it has been to date," emphasises Horster.

Press contact:
Chantal Schaum - Tel: +49 (0)69-298 99-948, Mobile: +49 (0)174-903 85 77, chantal.schaum@bnpparibas.com
Viktoria Gomolka - Tel: +49 (0)69-298 99-946, Mobile: +49 (0)173-968 60 86, viktoria.gomolka@bnpparibas.com
Melanie Engel - Tel: +49 (0)40-348 48-443, Mobile: +49 (0)151-117 615 50, melanie.engel@bnpparibas.com

About BNP Paribas Real Estate

BNP Paribas Real Estate is a leading international property services provider that offers its clients comprehensive services in all phases of the property cycle: Transaction, Consulting, Valuation, Property Management, Investment Management and Property Development. With 4,500 employees, the company supports owners, tenants, investors and the public sector in their projects thanks to local expertise in 30 countries (own locations and alliance partners) in Europe, the Middle East and Asia. BNP Paribas Real Estate is part of the BNP Paribas Group, a global leader in financial services.
As part of its commitment to sustainable cities, BNP Paribas Real Estate aims to play a leading role in the transition to more sustainable real estate that is low-carbon, resilient, inclusive and conducive to well-being. To this end, the company has developed a CSR policy with the following four objectives: to improve the economic performance and use of buildings in an ethical and responsible manner, to enable a low-carbon transition and reduce the environmental footprint, to ensure the development, engagement and well-being of employees and to be an active player in the property sector, building and promoting local initiatives and partnerships.

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About BNP Paribas in Germany

BNP Paribas is a leading European bank with an international reach. The BNP Paribas Group has been active in Germany since 1947 and has successfully positioned itself in the market with 12 business units. Private, corporate and institutional clients are served by around 6,000 employees nationwide in all relevant economic regions. www.bnpparibas.de