Drafty offices plummet in value

2023-09-01 07:37:00

Since this year, offices are required to have an energy label C. Or better of course, B or A. If not, they no longer meet the sustainability requirements of the government. The walls are too thin, windows too drafty and the gas boiler roars loudly. That is wasteful, the owner risks a fine.

Many thousands of offices are not yet sufficient: at least 10 percent have a substandard label (D, E, F or G). Another 30 percent, or 30,000 offices, do not even have an energy label.

The uneconomical offices are slowly becoming the pariahs of the real estate country, researchers from Maastricht University observe in the economist magazine ESB. They lost 20 percent of their value in a short time. Lead researcher Nils Kok explains why.

Those offices have not changed in themselves. Why are they worth no less than 20 percent less?

“That is quite easy to explain. In the real estate market, attention is being paid to inefficient office buildings that do not meet the label C requirement. Potential future owners think: in order for that building to meet the sustainable requirements, I have to invest regarding 30 to 60 euros per square meter.

For example, an office complex with an appraisal value of 5 million quickly needs 5 tons of green investments. Well, I subtract that from the value, kind of like a discount or discount. That is therefore a calculated loss, while the income from rent only increases slightly. What also contributes to the depreciation is that banks look critically at loans outstanding at offices with a low energy label. They charge higher interest rates.”

Enough reason for office owners to quickly become more sustainable, you would say.

“In part, that will certainly happen. Part of the office market is in the hands of pension funds and institutional investors, for example, who have multi-year plans ready to make their assets more sustainable. They have to, given the legal requirement.

But you also have a section of office owners who think: I don’t have that money to invest at all. Or: it will take my time. They are not just planning to comply with the mandatory step to label C. Perhaps only if a municipality or supervisor threatens with a penalty. That rarely happens, although a few warning letters have been sent to owners of poorly insulated offices.”

Should enforcement be stricter?

“It may be that the momentum in sustainability will pick up when the pressure increases. So if a municipality says: if you do not quickly meet the requirements, the office will be closed. The logical response will be: let’s get to work. It may still be that a small percentage of the owners say: I cannot invest 500,000 euros. At that time, other developers may be able to purchase a building and carry out a sustainable renovation. In addition, companies like to rent a green, economical office.

But I think a small percentage of the old, poorly insulated offices will eventually be demolished. They no longer meet modern standards. Part of it may be converted into living space. But this is often not an obvious choice, especially with the outdated buildings, the 8500 offices with the bad label (G), along a highway or on an industrial estate. There is structural vacancy of old offices in the Netherlands, and working from home has also increased. So we can do without some old offices.”

Read also:

A quarter of the offices have extremely high gas consumption

Not all offices comply with the new energy saving rules. This is often because the tenant and not the owner has to pay the energy bill.

1693656948
#Drafty #offices #plummet

Leave a Replay