The corona crisis has accelerated the introduction of "the new way of working. This plays into the oversupply of offices on the Belgian and certainly the Brussels rental market. Rising energy prices are also playing against non-sustainable properties. Ingenium can help you make your patrimony more sustainable, and thus keep it attractive and profitable.
Tenants in the office market are looking for maximum comfort for their employees at the lowest possible rent and operational cost. Both financial aspects in particular can weigh heavily in the trade-off between various properties. The energy crisis has put things even more on edge. And with the expansion of the ETS, Europe decided on April 18, 2023 to charge a carbon price for fossil fuels we use to heat buildings from 2027. This will cause an additional increase in opex costs.
REVENUES AND COSTS
The value of a building is in correlation to its rental income. Let us take as an example a building A that is well insulated and in peak condition, and a building B in a much less good condition. If at A the cost per m2 is 100 euros and the rent is 1,000 euros, the property will be put on the rental market at 1,100 euros/m2. However, if at B the cost per m2 is 300 euros, only 800 euros rental income remains if the rental price remains the same. The landlord of property B is thus at a disadvantage both in the short term - rental income per month - and in the long term.
THE TENANT'S MOVE
Now it seems as if, with the same rent, the tenant will only base his choice between A and B on other aspects, such as location, total surface area, accessibility, etc. However, if, as in the past year, energy prices rise sharply, the operational costs for the tenant of building A rise sharply. Anyone about to change locations or looking to rent a location for the first time will obviously not choose a property that scores poorly in energy terms. And a tenant with a current lease will do everything possible to stay within the established budgets. With rising operating costs, there may then be a demand to revise the rent downward. In either case, the owner of property B in the example will lose out. Clearly, it is the tenant's move today because there is plenty of choice. But the owner obviously should not sit idly by and can better anticipate the future.
PROACTIVE INVESTMENT
On the basis of energy studies of the building envelope and the technical installations, Ingenium advises patrimony owners and managers on the right steps to take to make non-sustainable buildings perform well again in the short term, and to evolve towards CO2 neutrality in the longer term. We set up a pathway based on TCO that takes into account both capex and opex costs. Making sustainable investments is a smarter move than letting unfavorable buildings only at (very) low prices or not at all in the future.
Want to know more about this project and/or the possibilities to make your project sustainable? Contact our expert Dietrich Schildermans: sebastien.belpaire@ingenium.be - 050 40 45 30.
