BayernLB aspires to make a significant contribution to developing a sustainable society, in particular in relation to real estate. Firstly, investments aimed at boosting energy efficiency and hence promoting the sustainability of real estate are essential if the fight against climate change is to be effective. Secondly, sustainability in this area brings greater direct economic benefits than almost any other area barring corporate social responsibility. Investments in energy efficiency measures or in the use of renewable energy sources have a positive effect on the long-term value of a property, for example in the form of lower operating costs, and thus also ensure competitiveness.
Accordingly, the EU Commission cites sustainable building in its lead market initiative as a market with the potential to more than double its profitability and help create a million jobs by 2020. Various certification systems - such as the German Sustainable Building Certification awarded by the German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen e.V. - DGNB) and the Leadership in Energy and Environmental Design (LEED) awarded by the US Green Building Council - have been successfully established to measure and document the sustainability of properties. Tenants and buyers alike will increasingly look for properties with these certificates in the future in the interests of ensuring their competitiveness. In this light, the Bank regards sustainable real estate as a key growth market and will continue to step up its exposure to this growing market segment. Customers and business partners are able to draw on experience from various projects:
- BayernLB provided a loan of EUR 40m to finance the construction of a new office building for E.ON Bayern in Regensburg. It is working with a closed-end real estate fund launched by Real I.S. AG. The property has around 28,000m 2 of office space and was awarded gold-standard pre-certification by the German Sustainable Building Council.
- Bayern Facility Management GmbH (BayernFM) is managing the energy-related renovation of an apartment complex for KGAL GmbH & Co. KG and on behalf of Hanseatische Investment GmbH (HANSA INVEST). The aim - in addition to significantly reducing energy consumption - is to maintain and increase the value of the apartment complex and thus ensure the long-term profitability of the property. The energy upgrade will take place over the course of three years with a focus on insulating the façade. Furthermore, alternative and innovative sources of energy supply are being looked into. Another company included in this project is CalCon AG, a spin-off of the Fraunhofer-Institut für Bauphysik (Fraunhofer Institute for Building Physics - IBP).
- BayernLB is lending around EUR 70m for the construction of the Pariser Höfe in Stuttgart. The Bank is supporting Munich-based Reiss & Co. Real Estate, which is developing a mixed-use building with around 20,000 m 2 of residential space and 7,300 m 2 of office space on a prime site as part of the Stuttgart 21 project. Reiss & Co. Real Estate was awarded silver-standard pre-certification by the German Sustainable Building Council for this project. BayernLB is assisting with the certification process through its real estate appraisal company LBImmoWert with the aim of gaining detailed information about the certification process and the data employed.
BayernLB recognises the advantage in value terms brought by such certifications in competitive markets and is increasingly supporting its customers in building sustainability projects. The Bank is extremely well-equipped to do so, thanks to its broad product range:
- As an example, Bayern Facility Management GmbH, can draw on its many years of experience in building management to assist customers through the German Sustainable Building Council certification process with a qualified auditor. BayernFM's many years of experience in facility management range from its inventory of around 2.1 million m 2 of floor space to implementing step-by-step projects to make large building complexes climate neutral.
- LB Immobilienbewertungsgesellschaft mbH documents value and risk-relevant aspects of sustainability issues in its expert reports, in order to enable BayernLB to offer its customers preferential terms for properties that can be shown to be planned and managed in sustainable fashion, in the form of higher collateral values and hence cheaper funding costs. LBImmoWert affirms the added value of certification, such as by the German Sustainable Building Council, both in the market and the loan collateral value, whenever it can be demonstrated that lower facility management costs, higher annual net income, longer residual useful life and improved interest rates are generated. There is therefore no need to change existing valuation systems and methods. LBImmoWert's concept should be regarded as a dynamic-innovative process, which can thus be perfectly adapted to meet future challenges posed by sustainability requirements.
- BayernLB passes these lower funding costs for financing properties that meet the required sustainability criteria on to customers. It also offers particularly attractive terms from a special quota and is able to assist customers along the entire value chain - from realisation to letting and selling and also facility management - thanks to its network and the strength in its association.
By taking this broad approach, BayernLB is tackling the issue of sustainability with the necessary rigour and substance and creating positive investment incentives for sustainability in the real estate sector.
However, these favourable financing terms are dependent on providing certain types of verification and agreements which are included in the loan agreements. The verification includes in particular relevant certificates with
- qualified energy certification
- a complete profitability calculation and
- the obligation to project all the key figures over the term of the loan.
We regard sustainability in particular as permanent investment to ensure competitiveness in the long-term. Being issued a certificate once is namely not enough to prove quality: The quality achieved must be shown to be maintained. The economically-relevant criteria must be projected in forecast and current calculations, defects which occur must be rectified and the ability to invest must be ensured by transparently calculated and established provisions.
Examples of other projects already financed:
- BayernFM assumes the role of general contractor and coordinates the structural restoration of the Munich listed building Karolinenplatz 6, as the new home of Bayerische Börse AG, in accordance with the latest economic and ecological standards.
- The district of Bad Tölz-Wolfratshausen commissions BayernFM to upgrade 15 of its buildings to sustainable and climate-neutral operating standards. The district is a member of the "Civil Foundation for Renewable Energy and Energy Saving/Energy Shift Oberland" (Bürgerstiftung für Erneuerbare Energien und Energieeinsparung / Energiewende Oberland), which is aiming to restructure energy supply by 2035.
- BayernLB supplies Munich's largest apartment owner, GEWOFAG, with EUR 70m in subsidised loans to upgrade the energy efficiency of 5,000 apartments in Munich.
- E.ON Bayern builds its new company headquarters in Regensburg with gold pre-certification from the German Sustainable Building Association. BayernLB provides EUR 40m for the construction in support of a closed-end real estate fund of Real I.S. AG.
- The City of Munich awards the GBW Group the "Award from the City of Munich for quality building, renovation, and living space for the elderly in 2010". The prize is granted partly for the renovation of the Munich residential complex on Morawitzky street.
- The structural restoration of the Frankfurt office building T11 dating back to the early 1970s is financed by BayernLB. The project is aiming at gold certification in accordance with the German Sustainable Building Council standards.
- KGAL commissions BayernFM to manage the energy-related upgrading of a KGAL apartment complex in Brühl near Cologne. BayernFM cooperates with the world-famous Fraunhofer Research Institute on this project.
- BayernLB finances the construction of the Düsseldorf office complex "CUBES", which is certified by the German Sustainable Building Council.