Real values Creating added value with property | Transforming the portfolio
29.11.2023 • 6 Reading Time
Like many industries, the real estate industry is facing major challenges. In addition to climate change, transformations that require new approaches – such as the concept of a restructuring culture – are also being noticed at a societal and cultural level.
In this article, you will find out what the idea of the conversion culture is all about and what potential we at Commerz Real also recognise in order to effectively face the future.
In this article, you will find out what the idea of the conversion culture is all about and what potential we at Commerz Real also recognise in order to effectively face the future.
Resource-consuming real estate
Real estate has a long half-life. They are built for the years, decades and even centuries to come, and the longer they last, the more important they become for the environment around them. Existing real estate therefore not only shapes the past and present, but also the future of our living environments.
At the same time, however, real estate presents us with significant challenges when it comes to the consumption of energy and resources as well as the impact on the environment: around 40% of all greenhouse gases in Germany are caused by the construction and use of high-rise buildings. This corresponds to 398 million tonnes of CO2-equivalent. Emissions from the global cement industry alone have increased from 500 million tonnes of CO2 to over 1.6 billion tonnes of CO2 in the last 30 years – and thus more than tripled.
The large amount of resources that flow into the construction and real estate industry is also evident at the other end of the value chain: more than half of the annual waste generation in Germany consists of construction and demolition waste such as rubble, excavated soil or gypsum waste. Although large parts of the waste generated can be recycled, the further electricity and energy consumption of these materials increases with the processing and reprocessing of these materials.
At the same time, however, real estate presents us with significant challenges when it comes to the consumption of energy and resources as well as the impact on the environment: around 40% of all greenhouse gases in Germany are caused by the construction and use of high-rise buildings. This corresponds to 398 million tonnes of CO2-equivalent. Emissions from the global cement industry alone have increased from 500 million tonnes of CO2 to over 1.6 billion tonnes of CO2 in the last 30 years – and thus more than tripled.
The large amount of resources that flow into the construction and real estate industry is also evident at the other end of the value chain: more than half of the annual waste generation in Germany consists of construction and demolition waste such as rubble, excavated soil or gypsum waste. Although large parts of the waste generated can be recycled, the further electricity and energy consumption of these materials increases with the processing and reprocessing of these materials.
Living environments in upheaval
Existing properties are not only undergoing environmental, social and cultural scrutiny. On the one hand, the attractiveness of cities plays a major role here:
more and more people are leaving rural areas and moving to cities, but residential space is scarce. In particular, there is a lack of affordable residential space: while there were still around three million social housing units in Germany in the 1990s, this number has now fallen to just over one million. The scarce supply means that prices continue to rise, so that fewer and fewer people can afford the available residential space.
On the other hand, German city centres are experiencing increasing vacancies. Where there used to be a lot of shopping and a large part of the trade took place locally, today more and more shops are empty or change hands within a few months. The German Trade Association (Handelsverband Deutschland) forecasts the closure of at least 9,000 brick-and-mortar stores in 2023 alone. Smaller specialist shops in particular are suffering from declining business in German city centres.
While the topic of resources is primarily about the environmental objectives of real estate, the question of economic and social objectives is now also coming to the fore. The focus here is on the use of existing properties - and the question of what role existing properties play when it comes to making city centres and residential districts fit for the future and adapting them to the needs of residents.
more and more people are leaving rural areas and moving to cities, but residential space is scarce. In particular, there is a lack of affordable residential space: while there were still around three million social housing units in Germany in the 1990s, this number has now fallen to just over one million. The scarce supply means that prices continue to rise, so that fewer and fewer people can afford the available residential space.
On the other hand, German city centres are experiencing increasing vacancies. Where there used to be a lot of shopping and a large part of the trade took place locally, today more and more shops are empty or change hands within a few months. The German Trade Association (Handelsverband Deutschland) forecasts the closure of at least 9,000 brick-and-mortar stores in 2023 alone. Smaller specialist shops in particular are suffering from declining business in German city centres.
While the topic of resources is primarily about the environmental objectives of real estate, the question of economic and social objectives is now also coming to the fore. The focus here is on the use of existing properties - and the question of what role existing properties play when it comes to making city centres and residential districts fit for the future and adapting them to the needs of residents.
Conversion culture: reimagining the existing
The conversion culture concept provides valuable solutions to these problems. The focus is on preserving and adapting existing buildings to make cities more sustainable and reduce the constant demolition and construction of new properties. It is important to develop a comprehensive understanding of the environment and to integrate real estate into its environment in the long term.
The aim of this approach is therefore to exploit the potential of existing properties and to develop them in a targeted manner, to make their spaces fit for the future and to save emissions in the process. Neighbourhoods, residential districts and living environments are actively co-designed by the local buildings. With targeted conversion, the historically growing importance of the respective properties is preserved and reframed.
At the same time, the needs of the local population can be taken into account and integrated into the redesign of the property. This creates something new from existing buildings that is optimally integrated into the environment and offers added value for society.
The aim of this approach is therefore to exploit the potential of existing properties and to develop them in a targeted manner, to make their spaces fit for the future and to save emissions in the process. Neighbourhoods, residential districts and living environments are actively co-designed by the local buildings. With targeted conversion, the historically growing importance of the respective properties is preserved and reframed.
At the same time, the needs of the local population can be taken into account and integrated into the redesign of the property. This creates something new from existing buildings that is optimally integrated into the environment and offers added value for society.
Our motto: change the running system
With all due respect for the size of the challenges, we at Commerz Real are optimistic: the transformation of existing properties offers a great opportunity for technically and economically optimising traditional buildings and neighbourhoods and adapting them to changing needs.
At the same time, however, it is crucial to consider the preservation of the cultural values associated with a property. After all, renovation projects should not only be functional and energy-efficient, but also preserve the history and character of a building and, at best, offer added value to the entire city district.
A prime example of this approach is our property 2Amsterdam in the Netherlands, which impressively demonstrates the symbiosis of renewal and maintenance. The original office building dating back to 1989 was ageing and faced the challenge of meeting current ESG standards.
But instead of a complete redesign, we opted for a sensitive approach to the renewal, in which the original structure was not only preserved, but also skilfully integrated into the new concept. Part of this structure is now exposed, allowing visitors and users to experience the building’s history directly.
At the same time, however, it is crucial to consider the preservation of the cultural values associated with a property. After all, renovation projects should not only be functional and energy-efficient, but also preserve the history and character of a building and, at best, offer added value to the entire city district.
A prime example of this approach is our property 2Amsterdam in the Netherlands, which impressively demonstrates the symbiosis of renewal and maintenance. The original office building dating back to 1989 was ageing and faced the challenge of meeting current ESG standards.
But instead of a complete redesign, we opted for a sensitive approach to the renewal, in which the original structure was not only preserved, but also skilfully integrated into the new concept. Part of this structure is now exposed, allowing visitors and users to experience the building’s history directly.
From office building to multifunctional hotel-office complex
The transformation of the former office building Twin Towers Amsterdam into the multifunctional hotel-office complex 2Amsterdam was an ambitious undertaking that was implemented in three sub-projects:
Another central aspect was digital networking. By implementing the B-Grid system and the Office app, we created a digital environment that simplifies building management while offering tenants a high level of flexibility.
Features such as light and climate control, room reservation for the gym or meetings, catering, parking reservations and an integrated complaints management system provide a solid basis on which users can build their individual digital solutions.
But, besides functional and ecological aspects, the renovation of 2Amsterdam also has a social aspect that significantly increases the cultural added value of the traditional property: by setting up the first public sky bar in the business district and integrating a hotel, we have fostered a lively interaction between the property and urban life. These new elements help to revitalise the neighbourhood, not only during office hours, but around the clock.
- the former AkzoNobel tower was converted into a hotel and increased in size.
- The Stibbe Tower retained its office function, but was extended by 11 floors at the side and rear.
- A three-storey underground car park was added to meet the requirements of modern mobility and parking facilities.
Another central aspect was digital networking. By implementing the B-Grid system and the Office app, we created a digital environment that simplifies building management while offering tenants a high level of flexibility.
Features such as light and climate control, room reservation for the gym or meetings, catering, parking reservations and an integrated complaints management system provide a solid basis on which users can build their individual digital solutions.
But, besides functional and ecological aspects, the renovation of 2Amsterdam also has a social aspect that significantly increases the cultural added value of the traditional property: by setting up the first public sky bar in the business district and integrating a hotel, we have fostered a lively interaction between the property and urban life. These new elements help to revitalise the neighbourhood, not only during office hours, but around the clock.
To sum up: the old is kept and added value is created
The journey of 2Amsterdam perfectly embodies our motto “Change the running system ”. By sensitively renewing and integrating modern technologies, we have created a harmonious symbiosis of past, present and future.
The added value for the neighbourhood is always in focus. In this way, we create attractive, sustainable and liveable spaces for its residents – and not only philosophise about, but also live a conversion culture.
You can find out more about the conversion culture at Commerz Real in our white paper.
The added value for the neighbourhood is always in focus. In this way, we create attractive, sustainable and liveable spaces for its residents – and not only philosophise about, but also live a conversion culture.
You can find out more about the conversion culture at Commerz Real in our white paper.