Real estate industry meets climate change

Climate change and its impact on the real estate industry

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Three major trends are currently shaping the real estate market in connection with climate change:

1. carbon price‍

Currently, only 30% of CO2 emissions worldwide are covered by CO2 prices.

2. regulatory pressure

Germany and other European countries must implement the highest environmental standards in the building sector to combat climate change.

3. revaluation of buildings

It becomes more profitable to meet energy standards. Otherwise, it becomes more expensive.

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Decarbonization against real estate obsolescence

The need to decarbonize buildings is becoming increasingly urgent. Inappropriate buildings could lose value in the future. ESG criteria, especially in relation to the environment, play a crucial role here. The building sector is characterized by both risks and investment opportunities in the context of climate change.

Real estate valuation: the role of CO2 emissions

Real estate valuation methods do not always take into account the environmental aspect. As a result, property valuations and returns are sometimes overestimated and low-carbon assets are underestimated. Companies are increasingly taking innovative approaches here and have developed the Green IRR, a carbon-adjusted key figure.

Application of Green IRR in real estate valuation

Green IRR is used to assess the risk or benefit of real estate in terms of CO2 emissions. This metric helps investors better understand the true costs and benefits of carbon-related investments.

Challenges and impacts of climate change

Climate change is already having a noticeable impact on the real estate industry, whether through flooding, heat islands in cities, or lowering of groundwater levels. It is not just about reducingCO2 emissions, but also about dealing with the direct consequences of climate change, such as building damage caused by extreme weather conditions.

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How can PROBIS help?

PROBIS cost management software can play a critical role here by helping real estate companies manage effective investments in climate-friendly adaptations and innovations. With the ability to accurately monitor costs and predict future developments, companies can better plan and respond to keep their real estate portfolios resilient and stable in value in a changing world.

Climate change has far-reaching implications for the real estate industry, but it also presents opportunities for investment and innovation. With the right tools and approaches, real estate companies can both meet their responsibilities and benefit from the opportunities presented in a climate-changed world.

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