Investment process

The consideration of sustainability risks runs through the entire investment process and is analyzed, taken into account and mapped accordingly at every stage. The research takes into account the regional focus of potential real estate investments: the investment focus is on the so-called middle segment of housing in the cities and metropolitan areas of Germany. This currently includes around 60-70% of the living space in Germany, although luxury apartments are not part of the investment spectrum. Factors such as infrastructural requirements, the need for affordable housing, etc. influence the location analysis of cities.

The research is compared with the demand for the investment behavior of potential investors. As part of fund planning, risks arising from the adverse effects of factors exacerbated by climate change are further minimized. The central point here is the desired portfolio diversification, which also attempts to minimize the influence of external environmental factors. Therefore, after the investment phase, a maximum of 25% of a portfolio should be in the same city and never more than 40% of the investment properties in the same metropolitan region.

Object level

At the property level, taking sustainability risks into account begins with examining each piece of land or property before purchasing it. This includes the integration of so-called “green factors” into the technical due diligence, the legal due diligence and the contaminated site investigation: the technical assessment of a property includes the analysis of the building structure, the current energy efficiency and the local conditions of the respective micro-location, such as the connection to local public transport, the availability of social facilities or shops for daily needs. These factors result in a summary of the results in the corresponding acquisition template for each property and the planning of investment measures with regard to the energy efficiency and social factors of the properties.

If a property is acquired for an existing portfolio, detailed planning of the development strategy and capex measures begins afterwards. The focus here is on saving energy, reducing additional costs and creating new living space. An individual sustainability strategy tailored to the property includes the analysis of energy requirements when purchasing, the planning of energy modernizations to improve the energy balance of the property to a maximum of 200 kWh/m² and an estimate of the CO² reduction through the planned investment measures. The design of the outdoor areas through greenery, the promotion of e-mobility and accessibility as well as the improvement of the quality of living are also included in the analysis.

Social Charter

In addition to the impact on the environment, social considerations play a central role in the ongoing management of the properties: the social charter applies to all properties. In addition, structural measures such as the construction of playgrounds on the outdoor areas ensure a balanced tenant mix. The properties themselves will be converted to “green electricity” and all new tenants will be given an offer that allows them to switch to CO²-neutral electricity. Part of the ongoing asset management is also the reduction of residual waste through individual waste concepts for each residential complex. If a property is sold again after the holding period has expired, energy information will be included in the sales advertisements. Sustainability factors are therefore taken into account over the entire holding period of a property and explicitly do not have a negative impact on the return, but rather underline the long-term nature of a real estate investment and the associated value retention.

Downstream effects

In addition to the acquisition and ongoing management of the respective property, every investment process also focuses on downstream issues whose sustainable effects also influence an investment decision. This includes a continuous target/actual comparison of the planned measures, consideration and monitoring of sustainability risks in the business model, and monitoring of the procedural implementation of sustainability strategies in the operating units in an investment process that attempts to do justice to all aspects of sustainability.