With the broader adoption and support of the concept of sustainability, investment habits have also started to change. Real estate market investments, which are significantly influenced by the environmental impact as well as the social and governance dimensions of sustainability, are being affected by this new approach.
The multifaceted benefits provided by sustainable real estate contribute to many of the United Nations Sustainable Development Goals. There are regulations and principles governing sustainable real estate investment processes in the European Union and some countries in the region. Additionally, sustainability is addressed in regulations, standards, and initiatives applicable in the European Union for real estate investment. On the financial side, supporting these investments through advantageous product rates or developing new “green” financial instruments is also possible. Countries also offer tax incentives, investment support, and other applications to facilitate the implementation of sustainable projects.
In addition to government incentives, the mandatory requirements related to sustainability also highlight sustainable real estate investments. Investors who comply with these increasing requirements today will play a pioneering role in the sector and secure a more prestigious position. Major real estate companies are in a race to achieve this prestigious position today and are working on how to expand their portfolios with sustainable real estate and make their existing properties more sustainable.
Sustainable real estate results in lower energy and operating costs. This provides a significant advantage for the property user. Due to this benefit, sustainable real estate offers higher rental yields and long-term lease agreements, providing investors with returns and shortening the investment payback periods. These advantages also reduce the property’s marketing time, nearly eliminating periods without income. The low energy consumption of such properties also makes them less affected by periodic energy crises and price fluctuations experienced globally in recent times. This ensures more stable cash flows for real estate and provides investors with a predictable level of regular cash flow.
The relatively high investment cost of sustainable real estate compared to standard properties was a factor that discouraged investors. Today, this difference has become manageable even in the short term.