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Environmental requirements for real estate continue to tighten, and the focus on sustainability and ESG is growing among both policymakers, investors and end users, leading to increased interest in certified buildings including those with the DGNB certificate.
A recent study of the Danish real estate marked shows a significant increase in certified properties in new construction. The number of DGNB certified buildings has increased significantly in recent years.
According to the Council for Sustainable Construction (Rådet for Bæredygtigt Byggeri), the number of DGNB certified buildings has increased from 20 in 2017 to 256 in 2023, and in the first eight months of 2024, 194 have already been certified.
The increase can also be seen at the municipal level, where a forecast from Byggefakta shows that throughout Denmark, a high and increasing percentage of the housing projects that investors and developers have either started or planned to start in 2024 to 2027 are currently reported to require a DGNB certificate:
Among the players in the Danish real estate market, private developers lead the way when it comes to certification, compared to public developers and social housing developers. Statistics from Byggefakta and Bygherreforeningen show that 51% of private development projects are seeking certification, compared to 46% of public development projects and only 32% of social housing projects.
The development is to a large extent driven by the increased awareness of end users. Kuben and Exometric have recently conducted a survey asking households in different regions of Denmark what impact sustainability has on their choice of housing. In the Capital Region of Denmark and Region Zealand, 5% of the households surveyed say that sustainability has the highest priority. In the Capital Region of Denmark and Region Zealand, 36% and 29% respectively say that sustainability is very important, but other factors have a higher priority. 38% and 39% respectively say that sustainability is less important than other factors, and 20% and 26% respectively say that sustainability is not important for their choice of housing.
According to Byggefakta and Bygherreforeningen, the number of certified building projects could be even higher, as a survey in 2024 shows that some developers prioritise sustainable solutions that could qualify their projects for certification, but choose not to apply for certification due to stricter legislation and burdensome procedures that make the certification process too expensive.
In Danish Real Estate M&A, the certification of the target asset has become a key focus and negotiation point for our clients – both in relation to existing buildings where certification has an impact on valuation ,and in relation to new buildings where the majority of the forward purchase and forward funding transactions that we have assisted in require the properties to be certified to either DGNB or BREEAM. This is a trend that we expect to only increase.
If you have any questions regarding ESG certified buildings, please do not hesitate to contact our team of real estate experts.