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The German government has set ambitious climate-protection targets to limit global warming. The aim is to achieve an energy-efficient and almost climate-neutral building stock by 2050. This applies particularly to buildings, responsible for more than 20% of CO2 emissions. The aim is to reduce the primary energy demand of buildings by 80% by the end of 2050. Achieving a nearly climate-neutral building stock requires targeted modernization measures that contribute to increasing energy efficiency. Barriers confronting the implementation of energy-efficient measures include lack of knowledge due to inadequate provision of information, lack of trust, and problems regarding financing possibilities. Therefore, solutions are needed for holistic concepts that make energy-efficient building and modernization more attractive. In addition to traditional business models (BM), measures that accelerate the implementation of energy-efficiency and BM that support the sustainable development of potential customers are sought. Expert knowledge must be shared to close information gaps; savings guarantees must be considered to build trust, and finally, financing possibilities must be available to support implementing sustainable measures. The research focuses on a modification of BM under the aspect of increasing energy efficiency in buildings for customers. This approach considers specific functions, effects, and benefits of BM. The aim of this extension is to create a basis for systematizing existing BM on the one hand, and on the other, to extend the proposed methodology. Finally, the developed guide supports startups designing new BM.

The German government has set ambitious climate protection targets to limit global warming. The goal is to achieve an energy efficient and almost climate-neutral building stock by 2050. This will require, among other actions, a reduction of the primary energy demand of buildings by up to 95% by the end of 2050. In order to achieve an almost climate-neutral building stock, measures for deep energy retrofit are required. In addition to an existing financial demand, there are additional barriers to the expansion of activities to improve the energy performance and to reduce greenhouse gas (GHG) emissions of the existing building stock. One way to overcome these barriers are novel business models such as Energy Performance Contracting (EPC). The question arises as to whether and how the reduction of GHG emissions can be taken into account in the savings guarantees as they are typical for EPCs. This and other questions are addressed in the paper using conjoint analysis. Among other results, it is pointed out that specific approaches are required for different target groups such as the public sector and private homeowners. Finally, recommendations for further action are given. The presented partial results are drawn from the research work "Analysis of business models with regard to their potential for GHG reduction and energy efficiency of buildings".

PurposeThe aims of this paper are to: provide a systematic overview of various publications and international research efforts undertaken to integrate sustainability considerations into the property valuation process; summarize the key results of these publications and research efforts; highlight the role of key valuation‐input variables in considering sustainability issues when applying traditional methods of valuing income‐producing properties; briefly present and comment on a broader concept of property value and the resulting implications for property valuation practice; and provide recommendations for change in the everyday practice of individual valuation professionals and for the future operation of professional organisations and valuation‐standard‐setting bodies.Design/methodology/approachThis paper builds on the authors' previous contributions to the discussion on sustainability and valuation, presents advances on these previous works and condenses the more theoretical issues debated earlier into concrete recommendations for future action. Starting from a literature review of the different strands of research relating to the new discipline of sustainable property investment, 31 publications and ten research projects that investigate in detail the topic of sustainability and property valuation are identified and the current stage of discussion is briefly commented on. On this basis, a systematisation of existing approaches for the integration of sustainability issues into the valuation process is presented, followed by further explanations of practical valuation issues such as identifying the key "adjustment screws" or valuation input parameters of traditional valuation methods. Finally, the underlying concept of property value is discussed and a "value map" is presented which conceptualises the relationships between different components of value as well as other value‐influencing forces.FindingsChanges are required in the processes of gathering, processing and presenting property‐related information, as well as in the methods for determining individual valuation‐input parameters and for explicitly stating formerly implicit assumptions and qualitative judgement. This includes but is not limited to the extension of the scope and informational content of standard valuation reports to include sensitivity analyses, risk documentation and a separate section on sustainability. The required changes should be supported by actions that could be undertaken by the professional and valuation‐standard‐setting bodies and organisations within the valuation world. These actions include: embracing and improved marketing of the qualitative nature of the valuation service; the development of educational material and formal guidelines; the provision of dedicated market research to assist valuation practitioners operating in different market segments, geographic regions and local sub‐markets; and adjusting and further developing existing valuation standards to enable and support individual practitioners in offering a two‐tier valuation service to clients.Originality/valueThis paper proposes that valuation professionals and their professional bodies are confronted with a new reality of changing value perceptions and systems among market participants, and offers practical recommendations on how to cope with this situation.

PurposeThe purpose of this paper is to explain the rationale for integrating sustainability issues into property valuation theory and practice and to provide initial suggestions for valuers on how to account for sustainability issues within valuation reports.Design/methodology/approachThe authors emphasise the key role of valuation professionals and of the valuation process itself in achieving a broader market penetration of sustainable construction. It is explained that, on the one hand, property valuation represents the major mechanism to align economic return with environmental and social performance of property assets, and thus to express and communicate the advantages and benefits of sustainable buildings. On the other hand, it is explained that gradual changes in market participants' perceptions in favour of sustainable buildings must be reflected within the property valuation and associated risk assessment process (otherwise valuers would produce misleading price estimates). The authors identify both the financial benefits and risk reduction potential of sustainable design as well as valuation input parameters that would allow these benefits to be reflected in property price estimates.FindingsThe authors show that the main reasons for immediately and rigorously integrating sustainability issues into property valuation are as follows: more sustainable patterns of behaviour are urgently necessary to sustain the viability of the Earth's ecosystems; a huge untapped market potential exists for sustainable property investment products and consulting services; sustainable buildings clearly outperform their conventional competitors in all relevant areas (i.e. environmentally, socially and financially); neglecting the benefits of sustainable design leads to distorted price estimates; and reflecting sustainability issues in property price estimates is already possible and the validity of this decision depends solely on the valuer's capability and sophistication to explain and justify his/her assumptions within the valuation report. However, it is also shown that efforts need to be undertaken to improve the description of property assets in transaction databases in order to provide the informational databases necessary to empirically underpin a valuer's decision to assign a "valuation bonus" to a sustainable building or a "valuation reduction" to an unsustainable/conventional one.Originality/valueThe paper postulates that valuation reports should be extended to include the following additional elements: a clear description of the availability of certain sustainability‐related property characteristics and attributes; a statement of the valuer's opinion about the benefits of these characteristics and attributes; and a statement of the valuer's opinion about the impact of these benefits and/or risks on property value.

PurposeThe purpose of this paper is to propose and discuss practical approaches on how to address risk and uncertainty within valuation reports, particularly when there is only insufficient comparable transaction evidence available.Design/methodology/approachA four stage approach to property valuation is proposed that can be particularly useful if there is insufficient comparable transaction evidence available: Identifying, measuring and expressing risk by making use of property rating approaches. Transforming risk into risk premia for calculating the yield on a risk free basis by partially making use of models of risk and return usually applied in finance. Simulating risk premia (since there is great deal of uncertainty involved in determining these premia) by making use of a statistical method commonly referred to as Monte Carlo Simulation. Using the derived yield's probability distribution in combination with further probability distributions for other valuation input variables (e.g. market rent) to calculate a range of possible outcomes of Market Value as well as a number of statistical measures that can be indicative of the valuer's perceived uncertainty regarding the valuation assignment.FindingsThe empirical part shows that due to data limitations determining idiosyncratic risk premia for property assets is not yet possible. This significantly hampers the development of robust yield pricing models and reinforces the need to create databases including information on both individual property returns and associated building characteristics.Practical implicationsThe paper postulates that there are few (if any) rational reasons for valuers not to use rating and simulation approaches as an indispensable element of the valuation process.Originality/valueA valuation approach that allows simultaneously addressing risk and uncertainty as well as sustainability issues within commercial property valuation practice is proposed.

Kompendium über ein Zukunftsthema Der gesamte Lebensweg eines Bauwerks von der Erstellung über Betrieb, Sanierungszyklen und Reparaturen bis hin zum Abriss und Entsorgung ist relevant für die erzeugten Stoffströme. Die entscheidenden Weichen, welche Umweltauswirkungen ein Bauwerk ausübt, werden jedoch meist in einer frühen Planungsphase gestellt. Der effiziente Umgang mit vorhandenen Ressourcen über nachhaltige Bauweisen und eine intelligente Materialwahl bietet ungeahnte Möglichkeiten, bislang vernachlässigte Potenziale auszuschöpfen und den steigenden Anforderungen in diesem Bereich nachzukommen. Der vorliegende Band liefert die oft fehlenden Fakten und Argumente zur Beurteilung von Entwurf, Materialien und Gebäuden

PurposeThe purpose of this paper is to report on the findings of a survey conducted by the Royal Institution of Chartered Surveyors (RICS) to discuss the extent to which qualified valuers have adapted their valuation practices in the light of guidance published by RICS in respect of sustainability and commercial property. The findings are placed within a wider debate between assessment of market value and investment value (worth).Design/methodology/approachThe paper is a theoretical discussion incorporating the results from an empirical survey of valuation practitioners.FindingsThe paper reveals that guidance published by RICS in 2011 has achieved limited, but variable, impact in terms of impacting on valuation practice due to a combination of factors including lack of knowledge of the guidance, non-requirement of clients to request sustainability reporting within valuations, paucity of data. It found that where worth (investment value) is required, sustainability factors are more likely to impact the calculation than where an estimate of market value is prepared. The paper identifies theoretical problems and practical barriers hindering an integration of sustainability aspects into valuation practice.Research limitations/implicationsThe empirical work was conducted prior to the embedding of guidance within the mandatory provisions of the "Red Book"; the study therefore reports on a direction of travel rather than the current position. The implications for research are the requirement to enhance data capture and to seek ways to break down the barriers to more comprehensive integration of such data so that worth and market values may begin to converge.Practical implicationsThe paper has practical implications for both the education of valuers which is proposed through the RenoValue project discussed in the paper and for the RICS in monitoring progress towards more specific integration within valuers' calculations. Further, the paper identifies that clients and lenders have a key role to play through the instructions given to valuers.Social implicationsThere is now widespread recognition that properties which are not resource efficient and which are not equipped to flex to changing occupier needs may not currently be "future proofed" in investment value terms and are likely to see value erosion over time. Further, buildings have a key role in terms of climate change policy. Whilst new buildings can be mandated to meet improved efficiency standards, the ways in which buildings owners can be encouraged to upgrade will be important moving forward. One way is through a value chain response.Originality/valueThe survey is the most comprehensive investigation of valuer's practice in relation to sustainability and the assessment of market value and worth undertaken. This provides a unique insight into the effectiveness of professional guidance and enables an informed discussion as to appropriate ways to enhance guidance moving forward.