The Importance of Sustainability in Real Estate

What areas should stakeholders in the real estate industry consider when it comes to sustainability?

Nübel: First, there are the regulatory requirements. It can be assumed that in the near future there will be a steady rise in sustainability regulation. This includes both the criteria that are defined directly by legislators and the indirect criteria that come from investors and capital providers. Already today, investment forms that meet ESG criteria are increasingly sought after. The real estate industry will play a major role in this, as it is very capital-intensive.

However, sustainability does not arise from regulatory requirements alone. In fact, I think there is a great danger here of setting the wrong positive or negative incentives. Our economic system is so complex that intervening significantly, such as by significantly tightening building regulations, could lead to effects that no one could predict. That is why sustainability must be achieved through a dialogic process of the various stakeholders along the construction value chain, each contributing their own targets and perspectives.

In short: I think the real estate industry needs a holistic approach in which individual and collective perspectives can be weighed against each other.

What are the biggest challenges that stakeholders in the real estate industry need to overcome on the road to greater sustainability?

Nübel: The construction value chain is very fragmented. As a result, there are many stakeholders involved in a single project. Another major problem is the strong separation between planning and construction. This is especially true when it comes to integrating existing building fabric into a new project, or using specific, environmentally friendly construction methods. Sustainability does not stop with energy-efficient buildings in operation. The entire life cycle must be taken into account. To make that a reality a much stronger integration of the construction value chain is required.

What are the biggest opportunities for pioneers in the industry today?

Nübel: Company leaders need to anticipate today what will be relevant in a few years. Developments often take place faster than expected, for example, in the sharp rise in energy prices. There is no way around the issue of sustainability. Now it is a matter of actually implementing sensible approaches.

What are the first steps I can take as a stakeholder for more sustainability in the real estate industry?

Nübel: It is important to start dealing with this topic intensively. Many companies have already started to do this. From there, sustainable concepts will become a competitive factor in the future. As already mentioned, in future, as today, regulatory requirements must be met. To fulfil regulatory obligations, companies must acquire or build up the appropriate competence. But this alone will not be enough, as sustainable construction places much greater demands on the entire value-added process. Even in the planning stage, criteria must be taken into account that previously played no role at all. For example, in the future actors, who previously had no points of contact in the value creation process, will have to engage with each other. This requires a much more integrative approach to building than has been the case to date.

In your opinion, which measures for more sustainability will be most important in the coming years? Which measure do you see “conquering” the market first?

Nübel: There are simply no patent remedies here. But in order to be able to develop the appropriate strategies, one has to understand where the demands of the market are heading and what new ideas, technologies and concepts one can use to meet them. The construction industry is on the move and the topic of innovation is coming to the fore. It is not only about technical innovations, but also about combining different approaches into a coherent, economical and sustainable product. In its final form, a building is always unique. But the processes used to plan and produce it are not. These are replicable processes. We should not seek to reinvent sustainability for every new building project.

How can I further my education in this area? And what is special about the “Sustainable Real Estate” course, which starts in September at the TUM Institute for LifeLong Learning?

Nübel: With the certificate program “Sustainable Real Estate” we qualify you as a manager for this challenging interdisciplinary task and help you find ways to create more value in your company. Innovation often arises from the synthesis of different disciplines seeking a sustainable value creation process. In doing so, we understand sustainable real estate development as a dialogue that takes the conflicting goals of real estate projects as a challenge and provides the skills to achieve optimal results.

This certificate program marks the beginning of a multi-level training program. Due to the interdisciplinary nature of the program, the fundamentals for strategically oriented decisions are considered and developed considering various perspectives. Based on real case studies and guided by experts from TUM and from practice, participants learn in small groups to understand real estate relevant topics in a process-oriented manner. In this way, participants acquire scientifically sound and integrated knowledge that enables them to assume entrepreneurial and political responsibility.