The German real estate market has long been a beacon of stability and opportunity. However, a new force is reshaping the landscape for investors: sustainability. In 2014 the Federal Government adopted the National Action Plan on Energy Efficiency. Now, just over ten years later, this is influencing real estate and by 2050, the residential building stock will need on average only just less than 40 kWhpe/sqm per year. The future of real estate consulting in Germany merges ESG factors with business acumen for better returns.

Understanding the Regulatory Landscape

With Germany at the forefront of the European Union’s push for sustainable finance, the EU Taxonomy Regulation and the Sustainable Finance Disclosure Regulation (SFDR) will be a big part of its real estate consulting future. These regulations help to ensure that investments are sustainable and transparent. Investors must ensure their assets meet these criteria to attract capital and avoid penalties. In this context, real estate consultants will be, and already are, essential in providing guidance on compliance, ensuring properties align with the latest energy efficiency standards, and verifying a building’s ESG performance.

The Rise of Green Premiums and Brown Discounts

A clear emerging market trend in Germany is a “green premium” for sustainable properties and a “brown discount” for their less-efficient counterparts. Buildings with high ESG standards, often evidenced by certifications like the German Sustainable Building Council (DGNB), are attracting higher rents and achieving greater marketability. A PATRIZIA study in 2022 showed that apartments with EPC ratings of A+ or A attracted rent that was 3% higher than those with EPC D ratings. This can only increase in the future, since wealthier households are prepared to pay the higher premium for energy-efficient buildings. Conversely, properties with poor energy performance had a rental discount of -1% in the study.

Leveraging Technology and Data for ESG Performance

The future of sustainable real estate consulting in Germany is deeply intertwined with technology. Consultants are utilising advanced data analytics and smart building technologies to measure and manage a property’s ESG footprint. This includes monitoring energy and water consumption in real time and assessing the use of sustainable materials. This data-driven approach not only aids in compliance and certification but also provides tangible evidence of a property’s sustainability, which is increasingly a key factor for investors and financiers.

Play your part in Germany’s Climate Action Plan 2050 to achieve carbon neutrality and invest sustainably. Contact SWIFT Group for sustainable real estate consulting for a greener tomorrow.