DGNB, Interview
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“The DGNB Certificate will play an increasingly important role”

With a market share of over 80 per cent for new commercial properties and more than 60 per cent of the overall market, the German Sustainable Building Council (DGNB) is the undisputed market leader in the German commercial property segment, well ahead of other certification systems. This was the conclusion of the latest market report issued by BNP Paribas Real Estate – Market Focus: Green Buildings 2017. Hermann Horster, Head of Sustainability at BNP Paribas Real Estate, answered our questions about the role played by certified buildings in the investment market, also covering a variety of other issues.

Henny Radicke: Hello Mr Horster, maybe you could tell us first how the market for sustainable buildings is developing compared to the rest of the investment market: are there significant changes here?

As Head of Sustainability, Hermann Horster is
responsible for sustainability issues at
BNP Paribas Real Estate in Germany

Hermann Horster: The investment market for commercial buildings in Germany took a downward turn last year, mainly because of the scarcity of supply combined with a surplus in demand. So we expected investment in sustainable buildings to shrink to the same extent. But to our surprise, it was actually the opposite. In absolute terms, investments in sustainable buildings increased, so of course there was also a rise in percentage terms in the share of total investments. One important factor fuelling this is forward deals for large developments in ‘Big Six’ locations, where almost all developments have signed up for certification.

HR: How does the DGNB look compared to other certification systems?

HH: In terms of certificates for new buildings, the DGNB has a market share of over 80 per cent. This puts it miles ahead of the competition in Germany. If you add new buildings to the existing buildings, the DGNB is still market leader in Germany.

HR: Where is the demand for certification, and who wants it? In large urban areas or small cities? Is it coming from investors or the owners of buildings?

HH: Most certification is happening in the major German cities like Berlin, Frankfurt, Dusseldorf and Hamburg. The number of certificates declines in percentage terms in relation to the size of a city. But we do find a large number of certificates in the smallest category of city, which has under 100,000 inhabitants. The picture’s quite interesting if we examine whether a building owner is an owner-occupier or an investor with a third-party tenant. In the big cities, it’s almost exclusively the developers or investors who are having buildings certified. In cities with under 100,000 inhabitants, it’s the owner-occupiers who account for most certificates.

HR: What direction do you think the market will move in and what role will the DGNB play – not just in Germany, but also worldwide?

HH: For a long time, the image of the DGNB was that it’s a typical German product: far ahead of the international competition when it came to quality, but weak in terms of marketing. So the high quality aspect was only really acknowledged in Germany and the DGNB was barely even represented abroad. Now, there are buildings in more than 20 countries with certification under the DGNB system. What was once a domestic product has slowly but surely evolved into an international brand, with DGNB-certified property found everywhere from China to southeast Europe, Scandinavia and the United States.

So the prospects for the DGNB are excellent. The competition recently discovered the topic of well-being – which in this context means the quality of the indoor environment the employees work in – and now they’ve also developed a certificate for this, independent of the building itself. But with the DGNB, the quality of the indoor environment has been an integral part of certification for ten years now – if the places employees work in aren’t well ventilated, for example, a building won’t receive a DGNB Certificate. I think this a good solution – I find it difficult to separate a certificate for the shell of a building including its facilities from the quality of the indoor environment that people have to live and work in. Can a building really be sustainable if it doesn’t offer a healthy working environment? The approach taken by the DGNB, integrating both aspects within one and the same certificate, is really more forward-looking in my opinion.

The same applies to the life cycle, which is part of the DNA of the DGNB Certificate. After the DGNB entered the market, its competitors started to adopt certain aspects of this approach. But it was only the DGNB that built on the basic idea of a product life cycle as a foundation for the entire certificate – what good is it if I use a certain building material in a structure but producing it generates more carbon emissions than I could ever save while operating the building? Now even the EU is starting to base European standards on this simple and effective idea, so going forward I believe the DGNB Certificate has an excellent chance of succeeding in the international market.

If the trends we’ve identified continue – so the DGNB brand remains by far the biggest player in Germany and it grows slowly but steadily in the international market – I assume the DGNB Certificate will play an increasingly important role.

Filed under: DGNB, Interview

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Henny Radicke

Henny Radicke is a member of the editorial staff at the DGNB in the PR department and is also responsible for Social Media. A period of voluntary work for a local TV channel in Stuttgart and a stint with the communication department at the Baden-Wuerttemberg Foundation have allowed Radicke to develop an eye for the issues and stories that appeal to specific target groups, leveraging communication as a multifaceted instrument.

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