Added value of certified buildings

REPORT MARCH 2019

Added value of certified buildings

Käthe-Kollwitz-Schule, Greifswald Educational building © Adam Sevens, photographer, Potsdam

Survey on added value of certified buildings Since 2009, the German Sustainable Building Council (DGNB) has been awarding certificates for sustainable buildings, neighbourhoods and interiors. Since then, more than 4,500 projects have been awarded in around 30 countries.

In Germany, the DGNB is the undisputed market leader and is regarded worldwide as the most ambitious system in terms of content.

All the systems share the overarching goal of creating better buildings and running them sustainably. The DGNB system rests on a holistic approach to sustainability that places equal importance on the environment, people and cost effectiveness. Furthermore, the entire life cycle of a building is considered, which also includes the planning and construction process. The DGNB evaluation system gets all stakeholders to agree on the project objectives at an early stage and to jointly develop suitable solutions towards them. Throughout the planning and construction process, the DGNB system allows continuous review of the goals set and optimisation measures to be taken.

The DGNB's offer for building certification is available for all kinds of uses – from office and administration buildings to educational institutions and production premises. In addition, the DGNB Flex system enables adaptation of the criteria catalogue to other special uses.

250 Other Consumer markets

200

Industrial buildings and logistics buildings Residential buildings (> 6 residential units)

150

Mixed use buildings Hotel buildings

100

Offices Buildings in use

50

Interiors 0

Districts 2009

2010

2011

2012

2013

2014

2015

2016

Figure 1 Development of the awarded DGNB awards in Germany per Scheme (excluding 2551 small residential buildings from serial certification)

2

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

2017

2018

“For us, DGNB certification is associated with increased quality. It is our goal that the DGNB must be visible and felt in the finished construction, so that we create homes, working spaces and educational environments that enhance comfortable and healthy living. With the DGNB at hand we can create the best possible conditions as well as enhance the quality of life for the individual - both physically, socially and culturally.”

Mette Kynne Frandsen CEO and Partner, Henning Larsen Architects

© Henning Larsen Architects

For building users, but also for builders and investors, sustainable buildings have many advantages – from avoiding the use of hazardous building materials to lowering ancillary costs during the use phase and ultimately to the long-term intrinsic value of the property.

How relevant such aspects are for the clients and what their experiences with the DGNB building certification have been like has now been surveyed for the first time. To this end, a questionnaire was developed as part of the supervision of a thesis at the University of Maastricht, which was sent to clients who had previously ordered DGNB building certification.

Facts on survey Total people contacted 674 Survey participants 71 Response rate: 11 %

Distribution of Scheme of the participating projects

Participating projects in other countries 14 % Survey projects * DGNB Gold award: 66 % DGNB Platinum award: 31 % DGNB Silver award: 3 % Comparative overview of distribution of all DGNB certified projects* DGNB Gold award: 63 % DGNB Platinum award: 18 % DGNB Silver award: 19 %

Offices

Logistics buildings 22 % 54 % 5 % 7 % 5 % 7 %

Consumer markets Business premises Residential buildings Educational buildings

*Note: Due to the changes to the "award logic" in 2015 (Platinum), the degree of fulfilment was surveyed. Status March 2019

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

3

Survey For what purpose was the building constructed?

When asked the purpose of construction of the building, 72 percent of respondents said it was to be let or sold.

28 percent said they would use the property themselves.

The high proportion of owner-occupiers is particularly important for the DGNB, because better sales or leasing options are irrelevant for this group. For this group, the quality of the building itself and its contribution to the health and wellbeing of one's own employees was all the more important.

Reasons to build property (Figure 1) Own use

28 %

41 %

31 %

“The DGNB certification system is an important criterion for Zalando – as a tenant and occupier of office buildings and industrial buildings – to ensure that the appropriate quality standards are met and that the buildings are audited for the various sustainability aspects.”

Robert Höhne Lead Construction & Development Zalando SE

© Zalando SE

“DGNB certification visibly confirms the corporate philosophy of the WITTENSTEIN group: Employees and clients feel very comfortable in our buildings. At the same time, the sustainable design ensures a constant rise in our efficiency and productivity.”

Thilo Brandel Head of Facility Management WITTENSTEIN SE

© WITTENSTEIN SE

4

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

Letting

Sale

Why did you have your building certified?

Participants were asked about their reasons for having the building certified. They could choose as many as they wanted from a given set of answers. They could also add their own answers. These were recorded under the point "Other aspects".

It turns out that there are many reasons for seeking certification. The most frequently mentioned item was "Marketing & image benefits". In second place was the possibility of using the rating system as a control tool and thereby ensuring the quality of the project. Similarly, social issues such as the health and wellbeing of building users are very often cited as grounds for building certification.

Better financing conditions do not (yet) seem to play an important role when deciding for certification.

In a free-text field, participants could also enter "Other aspects" of certification. These ranged from the desire to make an active contribution to climate protection, to the interest in alternative and pollutant-free materials, to the implementation of political guidelines and the responsibility as a building service provider for public buildings. One participant cited the accumulation of experience in building certification and related competitive advantages over competitors.

Reasons for certification (Figure 2) Marketing and image advantages

80 %

Quality assurance & control instrument

67 %

Increased demand from investors, tenants and clients

66 %

Increased productivity & wellbeing of building users

65 %

Cost savings due to avoidance of sick building syndrome

64 %

Reduction of operating costs

58 %

Optimisation of the risk/return ratio

52 %

Lower vacancy risk or faster sale

51 %

Reduction of idiosyncratic risk*

50 %

Higher potential for rent increase

45 %

Lower risk of failure of tech. building systems

44 %

Reduction of financing costs Reduction of capital costs**

34 %

Other aspects

34 %

Cannot be assessed

0

40 %

24 %

20

40

60

80

100

This question was answered by all respondents * For example, greater financial stability through lower impact of energy prices, demolition and disposal costs, future legal requirements ** Better financing conditions at banks

02

04

06

08

01

00

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

5

Property value enhancement The participants were asked the percentage by which the value of their property has been increased by certification and the measures taken to achieve it (in terms of the selling price or the achieved rents). On average, the certified projects were let or sold for about 7 percent more. For office and administration buildings, as much as 8.3 percent more and for commercial buildings by 12.5 percent.

This shows that sustainable and certified buildings are also worthwhile from an economic point of view. Although sustainable buildings are initially often more expensive due to higher material qualities and for other reasons, they are worth it in the long run, among other things due to lower costs for energy, water, maintenance and repair. Tenants or buyers of sustainable real estate have recognised this and are prepared to pay a higher price. Further costs reductions can be expected in future, as planners and executives gain experience in the field.

Value increase through DGNB certification (Figure 3)

7 %

Logistics buildings: ø 3.7 % (13 projects) Residential buildings: ø 2.5 %

average increase in value on certified buildings

(2 projects)

Operational buildings: ø 8.3 %

(3 projects)

Commercial buildings: ø 12.5 %

(4 projects)

Office and management buildings: ø 8.3 % (30 projects) 0 %

10 %

20 %

30 %

40 %

50 %

60 %

This question was answered by 83% of respondents

“Building certification creates added value for owners. By objectively determining the quality of the building, it can be used to increase value and efficiency.”

Dr Marcus Cieleback Head of Research PATRIZIA Immobilien AG

© PATRIZIA Immobilien AG

6

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

“In contemporary project development, the ecological and economic sustainability of a building is a key issue that is pursued throughout the entire development process in the course of obtaining certification and secured for the entire life cycle of the building.”

Peter Matteo Managing Director, Groß & Partner Grundstücksentwicklungsgesellschaft mbH

© Dipl. Des. Photography FH Alexandra Vosding, Frankfurt

In which phases of the project development was the DGNB auditor involved?

An important concern of the DGNB is taking sustainability aspects into account early on, during the planning phase: The further the planning or the construction has progressed, the more complex and expensive are the possible changes. This is why one of the questions asked about the project development phases in which the DGNB auditor was involved. The service phases of the fee structure for architects and engineers (HOAI)* were thereby taken as a basis.

Figure 4 shows that the auditor is most involved during the execution planning and object monitoring of DGNB Gold certified projects. It can also be seen that in platinum-certified projects, the auditors are usually involved in the planning at a much earlier stage. In other words: The early involvement of the DGNB auditor in an advisory role forms an important basis to attract a high accolade, if this is desired.

Auditor involvement (Figure 4) This question was answered by 85% of respondents 80 % PLATINUM

HOAI 1: Strategic definition HOAI 2: Concept design

GOLD

HOAI 3: Developed design

60 %

HOAI 4: Planning approval HOAI 5: Technical design HOAI 6: Tender preparations 40 %

HOAI 7: Tender support HOAI 8: Construction HOAI 9: Completion and documentation

20 %

HOAI 1

HOAI 2

HOAI 3

HOAI 4

HOAI 5

HOAI 6

HOAI 7

HOAI 8

HOAI 9

* HOAI = fee structure for services by architects and engineers

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

7

Expectations placed on certification and recertification Sustainable buildings meet different needs, depending on the perspective. Thus central issues for the owner-occupier of a building are its comfort, the longevity of the materials and low energy requirements, while the project developer is interested in increased demand and the long-term sustainable investment of the bond fund assets.

For this reason, the survey concluded with a question on whether the expectations and the hoped-for benefits of certification had been fulfilled and whether the respondent would opt for building certification again.

80 percent of respondents said their expectations had been met, and 82 percent would certify a building again.

Certification Expectations (Figure 5) These questions were answered by all respondents

80 %

have achieved their expectations and the hoped-for benefits of certification

82 %

would opt for building certification again

Results The survey shows that sustainable buildings are worth it – economically, ecologically and socially. In addition to added value in terms of economics, certified projects benefit from higher user satisfaction and improved ecological qualities as well as from the planning optimisation in general. This is also reflected in the response to the question of whether survey participants would certify another building according to DGNB

in the future, with 82 percent of the participants affirming this notion. The results of the survey confirm the DGNB's thesis that sustainable building is a value driver and not a cost driver. This is an agreeable result and serves to validate the many years of the DGNB’s work to make sustainability an integral part of the construction and real estate industry.

“For us as a user, DGNB certification is a seal of approval and a clear signal of sustainability on the part of our company.”

Amadeus Kurz Division Manager Central Services (CES) Hermes Germany GmbH

© Dirk Masbaum Fotografie Masbaum

8

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

“Certifications help promote innovation and the creation of real estate that is sustainable and future-oriented. The piloting of the DGNB district certificate at our Milaneo has shown that certifications continue to develop in order to reflect a holistic approach to sustainability measures and to render them measurable.”

Dr Andreas Mattner Managing Director Office, Traffic Industries, ECE Projektmanagement G.m.b.H. & Co. KG

© Anna-Lena Ehlers

“Our aim has always been to make sustainable construction more widespread and to enable as many parties as possible to obtain strict certification through an independent, credible third party. The serial certification of the DGNB was – and is – the right way to achieve this.”

Dr Dipl.-Business Engineer, Sven Lundie Head of Sustainability and Innovation Management DFH Deutsche Fertighaus Holding AG

© DFH

“DGNB certification is proof of a decent indoor environmental quality, a strong overall economy, a healthy environment and, all in all, a highly productive building. When you have a common goal in achieving a DGNB certification, higher productivity is ensured and decisions are always made on an informed basis.

This ensures a solid production base. ” Christina Jørgensen Director, Project Development and PPP MT Højgaard

© MT Højgaard

“Multiple certification enables us to implement our corporate sustainability standards in a simplified process. This saves us time, effort and money.”

Jörg Lin Staff Business Unit Manager STRABAG Real Estate GmbH

© Fotostudio Kessler, Endingen

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

9

Selected DGNB certified projects Mixed Use © Wittenstein AG

© Redevco

WITTENSTEIN Innovationsfabrik, Igersheim DGNB Certificate in Platinum

ALEA 101, Business premises Berlin Alexanderplatz DGNB Certificate in Platinum

Offices © Festo AG & Co. KG

© Vector Informatik GmbH

New construction Vector Zentrale, Stutgart DGNB Certificate in Platinum and DGNB Diamond

© Blocher Blocher Partners

Office building Herdweg 19, Stuttgart DGNB Certificate in Platinum

FESTO Automation Center, Esslingen DGNB Certificate in Platinum

© DAW SE

DAW Zentrale, Ober-Ramstadt DGNB Certificate in Gold and DGNB Diamond

Residential © Gundlach GmbH & Co. KG Bauträger, Fotograf: Clemens Born

Haus B1 - Projekt VIER Pelikanviertel Hannover DGNB Certificate in Platinum

10 ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019

© Peter Ruge Architekten & Landsea Group

Bruck Passive House, Changxing, China DGNB Certificate in Platinum

Hotel buildings

Educational buildings © gsp Städtebau

© Adam Sevens, Fotograf, Potsdam

Käthe-Kollwitz-Schule, Greifswald DGNB Certificate in Gold

Scandic Hotel Berlin Potsdamer Platz DGNB Certificate in Gold

Laboratory buildings

Healthcare buildings © Diakonissen-Stiftungs-Krankenhaus

© BASF SE

BASF Laboratory building B007, Ludwigshafen DGNB Certificate in Gold

Consumer markets

Diakonissen-Stiftungs-Krankenhaus, Speyer DGNB Certificate in Gold

Industrial buildings © Fotograf Alexander Heimann, Alnatura

© Edeka Südbayern

New construction Edeka Markt Gaimersheim DGNB Certificate in Platinum

Distribution center Alnatura, Lorsch DGNB Certificate in Gold

Buildings used for meetings/assemblies/gatherings © Prof. Arno Lederer

Kunstmuseum Ravensburg DGNB Certificate in Gold

© Thomas Ott

RheinMain CongressCenter, Wiesbaden DGNB Certificate in Platinum and DGNB Diamond

ADDED VALUE CERTIFIED BUILDINGS – MARCH 2019 11

Photo: © swencarlin.com

German Sustainable Building Council – DGNB e.V. Founded in 2007, today DGNB is Europe’s largest network for sustainable building, with around 1,200 member organisations. The objective of the association is to promote sustainability in the building and property sector and to create awareness in the wider public sphere. With the DGNB certification system, the independent non-profit organisation has developed a planning and optimisation tool for the assessment of sustainable buildings and districts, which gives assistance

Contact: Dr. Stephan Anders Deutsche Gesellschaft für Nachhaltiges Bauen – DGNB e.V. German Sustainable Building Council Tübinger Straße 43 70178 Stuttgart, Germany +49 (0) 711 722 3220 info@dgnb.de www.dgnb.de/en

in increasing real sustainability in construction projects. The foundation of the DGNB system rests on a uniform definition of sustainability which encompasses the environment, people and the economy to equal degrees. More than 3,000 persons in 30 countries have been qualified as experts for sustainable building via the DGNB Academy training and development platform.

Authors: Dr Stephan Anders (DGNB e.V.), Nico Schlun Contributors: Mario Schneider, Weronika Makaruk, Isabel Münzenmaier, Ulrike von Gemmingen © DGNB March 2019 All rights reserved. All information has been prepared and compiled with the utmost care. The DGNB assumes no liability for the accuracy or completeness of this content or for any changes that may have occurred since its publication.