Driving sustainable real estate across the globe

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1 2 3 4 Driving sustainable real estate across the globe Inside Driving sustainable real estate and creating value UK Highlights The growing BREEAM family focus on Netherlands, Spain, Sweden, Norway, Germany and the German-speaking nations 1 Cover images 1 Fredrik Selmers vei 4, Oslo 2 SO Ouest in Paris 3 Prologis EXPO REAL 4 SusCON

2 Driving sustainable real estate and creating value BREEAM is the leading international measure of a building s sustainability and a leader in the drive for a more sustainable built environment. Wide ranging application BREEAM has expanded from its original focus on individual new buildings at the construction stage, to encompass the whole life cycle of buildings from planning to In-Use and refurbishment. Scientifically robust but highly flexible, the BREEAM standard can be applied to a very wide range of building types and locations, with versions for new buildings, existing buildings, refurbishment projects and large developments. This flexibility also allows BREEAM to be adapted to an extensive range of geographical locations and conditions, and to meet local legislative, cultural and environmental needs and priorities. The International Bespoke version of BREEAM can assess single developments anywhere in the world. Tailored to suit local circumstances, it can be used at the design, construction, and initial occupation and refurbishment stages of a building s lifecycle. The BREEAM family In a number of European countries the use of BREEAM has gone a stage further with the development of country-specific BREEAM schemes operated by National Scheme Operators (NSOs). In the UK, the NSO is BRE Global, and there are currently NSOs affiliated to BREEAM in five other countries: - The Netherlands, where the Dutch Green Building Council operates BREEAM NL - Spain, where the Instituto Tecnológico de Galicia operates BREEAM ES - Norway, where the Norwegian Green Building Council operates BREEAM NOR - Sweden, where the Swedish Green Building Council is developing BREEAM SE - Germany, where the German Institute for Sustainable Real Estate, DIFNI, is operating BREEAM DE - Austria, where DIFNI is operating BREEAM AT - Switzerland, where DIFNI is adapting BREEAM CH - Luxembourg, where DIFNI is adapting BREEAM LU Schemes developed by NSOs can take any format as long as they comply with a set of overarching requirements laid down in the Code for a Sustainable Built Environment. They can be produced from scratch by adapting BREEAM, European or International schemes to the local context, or by developing existing local schemes. BREEAM is the world s first sustainability rating scheme for the built environment. Since its launch in 1990, BREEAM has contributed much to the strong focus on sustainability in building design, construction and use in the UK and this is now extending on a global basis. BREEAM is the most widely used sustainable building assessment method in the world, now used in more than 50 countries. BREEAM s influence has extended beyond the purely environmental aspects of sustainability, to those of building quality, performance and value. It has been credited with significantly improving site practice, material specification and building design. Creating value The commercial importance of sustainability is becoming increasingly apparent. A survey of property investors in 2010, for example, posed the question How will green buildings perform against non-green buildings? An overwhelming 86% of respondents said that green buildings will become more valuable. Subsequent studies have provided a growing body of evidence that BREEAM-rated buildings provide increased rates of return for investors, and increased rental rates and sales premiums for developers and owners. These include a study carried out by Maastricht University and published by the Royal Institution of Chartered Surveyors (RICS) in March Entitled, Supply, Demand and the Value of Green Buildings, it provides empirical evidence of the value of BREEAM certified buildings. The study used a sample of office buildings in London and, using data from transactions from 2000 to 2009, found that these buildings achieved: - 21% premium on transaction prices - 18% premium on rents BREEAM Registered Assessments February 2013 National Scheme Operator (NSO) 7 More London, PriceWaterhouseCoopers BREEAM Outstanding HQ in London BREEAM Key Facts - Over 200,000 buildings certified on a global basis, more than 40 million m 2 of floor area - Research shows BREEAM helps increase value 21% on transactions and 18% on rents from a 2012 study - A respected international standard, adapted locally - Strong National Scheme Operator family throughout Europe - Used by leading international investors, developers and corporate occupiers to drive value - Schemes for new, existing buildings and communities

3 Key features of BREEAM There are now BREEAM schemes for new buildings, existing buildings, refurbishment projects and large developments. They are assessed, rated and certified on a scale of Pass, Good, Very Good, Excellent and Outstanding. More than 200,000 buildings have been BREEAM certified, with around a million registered for certification. The key features contributing to the scheme s success include: Independence The BREEAM assessment process is based on an international network of more than 2600 fully trained and licensed, independent BREEAM Assessors. This approach gives added assurance that BREEAM rated buildings are genuinely as sustainable as they claim and that the highest scoring buildings represent some of the best examples of sustainable design and construction in the world. Scientific rigour and regular updates The BRE Group, the originator of BREEAM, has been at the forefront of scientific research and development in the built environment sectors for more than 90 years and in recent decades has taken a leading role in sustainability issues. BREEAM is a tried and tested standard that has been proven in the marketplace. It is nevertheless regularly updated in line with new developments, evolving legislation, feedback from users, and consultations with professionals and experts around the industry. The current standard was launched in 2011 and the next update is due in eplus Hauptverwaltung Holistic approach The BREEAM assessment encompasses sustainability in its widest sense not just energy use and carbon emissions, but also a wide range of issues concerned with water consumption, health and wellbeing, pollution, transport, materials, waste, ecology and management. Driver of sustainability The aim of BREEAM is not only to recognise and reward buildings with genuinely sustainable credentials, but also to improve sustainability in those buildings and in the built environment as a whole. The targets set by the BREEAM standard encourage and help developers and project teams to push beyond regulatory requirements for sustainability. Support for innovation In a survey conducted in the UK by BSRIA (Building Services Research and Information Association) for Schneider Electric, nearly nine out of ten (87%) of respondents said that BREEAM drives investment in innovative techniques and technologies. To further encourage innovation, additional credits are available as part of the BREEAM assessment for innovations that take forward some aspect of sustainability. Waitrose are a major corporate user of BREEAM in the UK. Highlights in the UK The Hive, Schneider Electric s international headquarters in Paris, which achieved the first Outstanding rating under the new BREEAM In-Use International. BREEAM continues to grow on a global basis and in its original home market the United Kingdom. In 2012, over 2000 new constructions were registered for certification in the UK and more than 300 buildings obtained BREEAM In-Use certification. BREEAM is growing steadily in both public and private construction projects and interestingly around 1 in 4 projects achieve an Excellent or Outstanding rating, compared to 1 in 5 for 2011, a sign that the UK market is continuing to rise to the challenge set by BREEAM. A record number of projects achieved the Outstanding rating under BREEAM in the UK last year. This includes 7 More London, the corporate headquarters for PriceWaterhouseCoopers on the banks of the River Thames in London, and The Green, a sustainable student village at the University of Bradford. Another example of a committed corporate user is Waitrose, the major supermarket chain, who achieved two Outstandings and a number of Excellents. Toby Marlow of Waitrose says We recognise the benefits of using industry-leading accreditation, therefore we committed in 2010 to adopting BREEAM assessment as a key tool in aiding our design and construction of low carbon shops. This is embedded into our ways of working, delivering reductions in our carbon emissions, lowering our running costs and educating partners and customers on the subject of carbon reduction, social responsibility and our overall community interaction. All of these will help us to achieve our business objective of an absolute carbon reduction.

4 6 Focus on the Netherlands BREEAM NL The Dutch Green Building Council (DGBC) was founded in 2008 and is the National Scheme Operator for BREEAM in the Netherlands. DGBC chose BREEAM as its sustainability method because the scheme is adaptable to local standards and legislation, and is the most widely used sustainability certification scheme in the world. This allows for both the effective assessment of Dutch projects and accurate comparisons with projects in other countries. Now that BREEAM NL has been accepted by the market, DGBC is moving forward looking for new opportunities and improved ways of working. Putting a value on sustainability Many of the major Dutch real estate finance companies recognise the importance of sustainability. In 2011/12, ABN AMRO, FGH Bank, ING Real Estate Finance, SNS Bank Business, Syntrus Achmea Real Estate and NIBC Bank committed themselves to contributing to a process for developing a more sustainable built environment. These finance companies are members of the Market Financiers Group of the DGBC. They have agreed to take joint steps, in their roles as real estate investors, towards putting a value on sustainability. A research project is about to be launched by this group, which focuses on the extent to which sustainability influences the financial risk for investors in new construction, redevelopment and refinancing. As part of this research, DGBC will be looking at viable forms of sustainability financing and appropriate sustainability requirements for such projects. BREEAM NL Junior To increase sustainability awareness among children (and indirectly among teachers and parents) DGBC has launched the BREEAM NL Junior learning programme. Children are able to use BREEAM NL Junior to assess the sustainability of buildings based on themes from the BREEAM scheme. The programme was launched during the Dutch Green Building Week in 2012, where children aged 9 to 12 were asked to assess the World Trade Centre in Amsterdam. BREEAM NL Junior is on the curriculum for primary school pupils. They can use it in the classroom to map out how sustainable their school is, and can also use the method on other buildings. Sustainable demolition The Netherlands is aiming to be the first country with a certification process for demolition and deconstruction projects BREEAM Demolition and Deconstruction. The scheme is due to be developed in collaboration with several Waitrose are a major corporate user of BREEAM in the UK demolition and commodities companies. It will consider issues such as the sourcing of materials, adaptability of buildings, reuse of materials and sustainability of demolition sites. DGBC Director Stefan Uffelen says, Our aim is that BREEAM Demolition will close the gap between the certification processes for new buildings and existing buildings. The basic principle is that the whole material chain connects, closing the circle. Major Real Estate financiers in the Netherlands have signed a covenant committing them to contribute to the development of a more sustainable built environment BREEAM NL Junior aims to increase sustainability awareness amongst children, teachers and parents. Focus on Germany and the German-speaking nations BREEAM DE, BREEAM AT, BREEAM CH and BREEAM LU With its broad social, political and economic consensus for sustainability, the German-speaking countries with Germany in the lead provide an ideal setting for the promotion and use of BREEAM. The Scheme Operator is the German Institute for Sustainable Real Estate, DIFNI. Launched in March 2012, DIFNI is a young and dynamic organisation that is dedicated to the promotion of BREEAM in Germany and the German-speaking countries. DIFNI stays in close contact with developments in the real estate sector in order to provide applicable, affordable and local BREEAM products to these markets. To ensure these are continually improved, DIFNI cooperates with the external DIFNI standing panel and the DIFNI advisory board. In line with this approach, DIFNI s corporate culture is based on confidence and mutual respect. These principles combined with DIFNI products and services, have delivered a very high level of market acceptance and the market leader position for In-Use Buildings in Germany. Statements of BREEAM users Prologis Prologis is a world-leading owner, operator and developer of logistics real estate. The firm s logistics centre in Bad Hersfeld, Germany was certified to BREEAM DE Bestand the certificate was presented to Prologis at Expo Real in Munich in October The 37,500 m 2 facility was one of the first buildings in Germany to receive a Good assessment for construction and operation. Prologis cooperated closely with DIFNI in the pilot project to adapt the UK system to the German market. As a company that invests long-term, Prologis focusses on the role of existing premises, says Tim Fischer, the firm s head of property management in northern Europe. Certifying existing real estate allows us to continually optimise the operation of a property, for instance by lowering utility costs which is particularly beneficial for our clients. Redevco Redevco manages and develops major retail real estate portfolios in Europe and has played a key role in supporting the development of BREEAM DE and BREEAM AT Bestand. To continually increase the quality, sustainability and value of the portfolio is our primary objective for the coming years, says Christian Socha, Project Manager Portfolio, Redevco Germany. Redevco developed its own green building strategy in 2008, setting ambitious, specific goals for future projects. We therefore need a standard and easy-to-use tool to rate, compare and improve the environmental performance of our existing building stock. We believe that BREEAM DE Bestand will succeed in the market. Redevco is a founding member of the advisory board of DIFNI and is actively supporting the pilot phase and further development of the scheme. Our first assessment of a major C&A-store in Dortmund has already been successfully completed and we are planning further certifications in our portfolio. We think that DIFNI, together with BRE, have done a tremendous job by establishing BREEAM DE Bestand in such a short time. Prologis logistics centre in Bad Hersfeld Redevco s C&A outlet in Dortmund Deka Immobilien GmbH Deka has made extensive use of BREEAM, initially in the UK and more recently in and around Germany. Deka s first experience with BREEAM was in the UK, where we own properties worth some 2,600 million, says Donal Campbell of Deka. Starting in 2009, virtually all of these buildings were certified using BREEAM In-Use, which proved to be a cost effective and practical certification system. Deka s Novum development in Frankfurt BREEAM was clearly the system of choice for the UK, but at this time there was no obvious choice for certification of existing buildings in Germany, where a significant number of our investments are located. In a pilot project, six buildings in Frankfurt were certified using BREEAM In-Use. The process worked well, the key to success being effective communication between the Deka s project team, the facility managers, the tenants and the sustainability consultant. Following the introduction of BREEAM DE, we have used this to certify a number of buildings. Other systems will continue to be used, depending on local and tenant requirements as part of a diversified certification policy.

5 Focus on Norway BREEAM NOR Government legislation has led the drive for greater sustainability in Norwegian building stock, but market demands are now taking over as the main driving force in non-residential buildings. Tenants and developers want the higher environmental standards that will increase customer satisfaction, protect the environment and improve business. BREEAM NOR has been the main catalyst for this. The use of BREEAM NOR has become mandatory in the development of non-residential buildings. This is extraordinary when you consider that the scheme was only introduced to the market a year ago. There are now 68 projects registered for BREEAM certification. Taking bespoke and unregistered projects into account, we estimate that BREEAM is being used in more than 150 ongoing developments. All high profile commercial projects in Norway are making use of BREEAM NOR or BREEAM Bespoke, with office buildings currently being the most BREEAM-focused building sector. Focus on Sweden BREEAM SE In 2010, the Toyota Centre in Bäckebol, Gothenburg became Sweden s first BREEAM certified project. Two years later, environmental certification of the built environment has made significant strides in the design and construction industry across Sweden. Sweden has long been considered a pioneer in environment and sustainability, and the high level of practice and knowledge in these fields has been the basis for the emergence and growth of environmental certification systems. The Sweden Green Building Council (SGBC) was established in 2010 as a non-profit organisation dedicated to managing and developing environmental certification work in Sweden s building sector. Starting with a core group of 13 prominent construction and real estate companies, SGBC now supports a member base of almost 200, and also maintains an international presence as an Established Member of the World Green Building Council. Industry support BREEAM NOR is owned by the Norwegian Green Building Council (NGBC), which has a membership of 190 market leaders who represent the whole supply chain. The building and real estate sectors are supportive of BREEAM NOR and the Green Building Council in a way that gives the sector a strong and positive relationship with the Norwegian parliament and government officials. Adapted for Norway The scheme has been adapted to meet the particular needs of Norwegian practice, standards and regulations, but retains the core standards that ensure BREEAM NOR is equivalent to all other BREEAM schemes. As such it acts as the national reference for building sustainability, while still representing the world s leading building sustainability assessment scheme. As with other Nordic countries, Norway has very strict controls on emissions and hazardous substances and a policy of mandatory transparency with regards to these issues. A BREEAM NOR certificate authoritatively demonstrates that the building has complied with these controls. This in turn helps to ensure the health and wellbeing of building occupiers, and the prevention of pollution throughout the building s life cycle. Battery of Europe Norway is a low carbon society. The energy used in real estate, for example, is sourced mainly from hydroelectric power, with heat from district heating. BREEAM NOR is supporting Norway s drive to be the battery of Europe, by encouraging developers to be energy efficient and to make use of new renewable energy sources. This allows us to make our hydroelectric power available to consumers outside of the country. An alliance (of developers, architects, suppliers and environmental experts) called Powerhouse is setting a standard for designing commercial buildings that are energy positive they produce more renewable energy than is consumed during the production of building materials, construction, operation and ultimate disposal of the buildings components. BREEAM NOR will provide an overall environmental standard for Powerhouse. Existing buildings and large developments In addition to BREEAM NOR which focuses on new construction, NGBC introduced BREEAM NOR In-Use in This helps building managers to reduce the running costs and improve the environmental performance of existing buildings. BREEAM Communities, which helps planner and developers to improve and measure the sustainability of large-scale developments, is also being adapted to Norwegian conditions. Powerhouse in Trondheim, aiming for the highest standards of BREEAM NOR. Developer: Entra Eiendom AS. Architect: Snøhetta. Østensjøveien 27, Oslo was listed as one of the 100 most sustainable projects at the Rio Conference. Aiming for high BREEAM NOR standard, due in Developer: NCC Property Development AS. Architect: Henning Larsen Architects. BREEAM SE pilot project MAX IV in Lund Uniquely Swedish adaptation Using BREEAM, the market saw an opportunity to create a uniquely Swedish adaptation, sensitive to the realities of designing and building in Sweden and inclusive of Swedish standards, construction processes and property ownership and management structures. Development work, which has involved close collaboration with BRE, has been underway since early The first Swedish version, called BREEAM SE, will be launched in the spring of 2013 and will retain the structure and the weighting factors found in BREEAM s international version. This alignment with the international version will allow comparisons with projects in other countries, creating value for shareholders by providing quantitative evidence of building performance. The certification will also make it easier for the tenant to select buildings with high environmental performance. Today, about 50 projects in Sweden are registered under BREEAM International, with an additional 20 planning to register under BREEAM SE. Pilot projects The SGBC is supporting the quality control and launch of BREEAM SE. Part of this work includes a pilot programme involving the pre-certification of four projects submitted by SGBC member companies, NCC, PEAB, SEB and AB ML4. One of these involves the 50,000 m 2 MAX IV plant in Lund in southern Sweden, which will produce synchrotron radiation. Being developed by AB ML4, the building will be owned by the commercial real estate company Wihlborgs and property developer PEAB, and the tenant will be Lund University. The project will be certified in accordance with the new Swedish BREEAM manual. I see great potential for BREEAM to be developed as the leading international certification system, says Jonny Hellman, Technical Manager BREEAM at SGBC. I also hope to see incentives in the form of lower interest rates and faster building permit processes from politicians and authorities. Sweden can learn from the lessons of other countries in this respect.

6 Focus on Spain BREEAM ES Instituto Tecnológico de Galicia is the National Scheme Operator that manages BREEAM in Spain. It is a private, non-profit institution, with more than 20 years experience as a technology centre focused on new technologies and innovation applied to sustainability. In 2010, an advisory board comprising some of the most important construction sector stakeholders in Spain was established to define strategies and support the implementation of BREEAM in line with market expectations. The development of the various schemes was carried out by more than 200 experts, representing a range of interests, including universities, contractors, public administration and investors, and made use of case studies of real projects. The schemes adapted to Spain are: BREEAM ES Commercial applicable to offices, retail and light industrial buildings for new construction, refurbishment and fit-out. BREEAM ES Residential applicable to home buildings, single and multi-dwellings, for new construction and refurbishment. ISLA AZUL Shopping Centre Scheme BREEAM ES In-Use 2012 BREEAM ES classification: P1: Very Good (55.83%) P2: Excellent (73.35%) Location Madrid Client Ivanhoe Cambridge & Grupo Lar Main environmental achievements foreseen Implementing new measures is expected to save about 25% of energy in the next few years and 3% of water, mainly in the irrigation of green areas. BREEAM ES In-Use applicable to existing non-residential buildings that have been operating for more than two years. BREEAM ES Urbanism applicable to urban planning. BREEAM Bespoke tailor-made scheme according to the planned use of the building, for new construction, refurbishment and fit-out. The quality, independence, impartiality and integrity of BREEAM ES are values of upmost importance, and so BREEAM ES activity is certified against ISO accredited to ISO So far more than 200 people have received BREEAM training; approximately 70 have been licensed as BREEAM assessors and more that 60 projects have been registered. Companies using BREEAM in Spain include Repsol, MRW, Eroski, Kutxa Bank, Neinver, Orona, Agbar, Axa Real Estate, Redevco, Unibail Rodamco, Everis, and Decathlon. We choose BREEAM to gain market recognition for the low impact of our retail buildings, because it is a certification method with a high reputation at the international level, says Gotzone Artabe of Eroski. BREEAM guarantees the incorporation of best practices, and encourages and recognises innovative solutions. The selection of BREEAM ES Commercial for the fit out of our main offices demonstrates our confidence in the brand, says Juan Francisco Yáñez, General Manager of Everis Offices Madrid. BREEAM is well established in Spain and recognised at an international level. Case Studies MRW corporate office Scheme BREEAM ES Commercial 2010 Offices Certificate Final certificate Excellent (79.25%) Type of Project New construction Location L Hospitalet de Llobregat; Catalonia Client MRW Main environmental issues: - Energy certification: A level - Reuse of rainwater and grey water - Use of material with low impact as recycled aluminium slats - Life cycle analysis of the building

7 Driving sustainable real estate across the globe Contact the BREEAM family UK +44 (0) Germany +49 (0) Netherlands +31 (0) Spain Norway Sweden