Last year in Hungary both the number of new green buildings and the “greening” of existing buildings continued to grow dynamically. The industrial property market is experiencing a real boom, not only for new developments and office buildings but also for green logistics and manufacturing sites.
Health in focus
According to the Colliers Green Building Certification Report, while we have only seen pre-certifications in the past, two buildings attained final WELL certification last year. The social responsibility of developers and owners is demonstrated by the fact that more and more buildings are being awarded the Access4you certificate. Access4you certifies the accessibility of buildings for different user groups with special needs.
According to Colliers’ database, there are 100 certified buildings representing around 24% of the total modern stock. As mentioned above, two new Office buildings have already been awarded WELL certification, 6 further have attained pre-certification and a number of ongoing projects are registered, so experts expect significant growth in the coming years.
Many developers and owners are also announcing that they will use only green energy in their buildings, or even go completely carbon neutral. Based on their research, Colliers believes there is an unprecedented focus on sustainability, not only in the real estate market but also in the way individual companies operate.
Office market going green
The office market in Budapest will see an increase of nearly 180 000 m2 of green office space in 2021. There has been a significant increase – up to 160 000 m2 – in new build stock, with almost all becoming green certified.
Although the total floor area of the existing building certifications was 150 000 m2, the total floor area increased only slightly due to non-renewed and expired certifications. All in all, 44% of all modern office space, 1 750 000 m2, is considered green.
For BREEAM In-Use building certifications both newly certified properties and those that have entered the 3rd annual new audit period can only be certified in the more demanding v6 version. It is interesting to note that the similar version of LEED, Operation and Maintenance, has also been renewed, much simplified.
Industrial and Logistics are also on the rise
It also seems to be true for industrial properties that they are developed with at least some kind of green certification as well. Among the companies involved in manufacturing, the most recent to obtain LEED Gold certification was Vitesco in Debrecen, whereas the new LEGO factory in Nyíregyháza will be built with this in mind. Previously, Procter & Gamble, Henkel and Becton Dickinson have also achieved similar LEED New Construction certifications. Among the logistics service providers, Prologis and Budapest Freeport Logistics have built their warehouses to LEED or BREEAM standards, and many other developers are now following suit. – Colliers highlights.
CTP has undoubtedly taken the biggest step in greening its existing stock and has achieved BREEAM In-Use certification for its entire portfolio. This represents more than 20 buildings in Hungary alone. In addition, they have recently announced the construction of 6 solar power plants on the roofs of their buildings, each with a capacity of 500 kW.
ESG – a hot topic
As Colliers predicts, ESG is a topic that we are probably hearing more about than green certifications, and we will hear even more in the future. The acronym ESG stands for Environment, Social and Governance. It is important to note that ESG is not a certification (although there are companies that issue such ratings) and not a mandatory regulation (for now), but rather a set of sustainability guidelines on how a company should operate in the three areas above.
Environmental: factors by which the company contributes to climate change, including greenhouse gas emissions, waste management, energy efficiency, biodiversity, etc.
Social: human rights, labour standards, exposure to illegal child labour, occupational health and safety compliance, equal opportunities, integration of local communities.
Governance: rules or principles that define the rights of different stakeholders in the governance of a company, the composition of management bodies, workplace culture, information sharing, internal control and compliance, remuneration, etc.
An ESG report is effectively an extended sustainability report, covering new areas besides the environment. ESG reporting can bring many benefits to companies, the importance of each topic depends largely on the activities of the company concerned. There are, however, recommendations or standards, such as the widely used GRI (Global Reporting Initiative) or the GRESB (Global Real Estate Sustainability Benchmark) for measurability specifically for the real estate sector.