Vertical Gardens:
More Nature and more Value for Properties

Sustain­able prop­er­ties have been proven to offer good asset values and rental income. But how can the plant­i­ng of outdoor areas increase this effect and thus their attrac­tive­ness on the market? In the current issue of the Valdivia News­room, we look at the possi­bil­i­ties of using an “XXGreen concept” not only to strength­en climate protec­tion and sustain­abil­i­ty, but also to increase the qual­i­ty of use and value of prop­er­ties. As with the ding­bats and office vacan­cies, this time the focus of our prop­er­ty market­ing tips is on the prod­uct itself.

Green build­ing: oppor­tu­ni­ties and hurdles

What is the current status of “green build­ing”? Approach­es such as the Heat­ing Act, passive hous­es and build­ing with wood point in the right direc­tion. Never­the­less, the over­all devel­op­ment still seems rather restrained¹:

• In 2024, sustain­abil­i­ty still gener­at­ed a slight increase in demand and posi­tive value devel­op­ment. Over­all, howev­er, this factor did not play the expect­ed, over­rid­ing role in the valu­a­tion and returns of prop­er­ty and construc­tion projects.
• The study partic­i­pants cited the high initial costs for sustain­able construc­tion and the corre­spond­ing mate­ri­als as the biggest hurdles. Anoth­er obsta­cle is the lack of suit­able special­ists and qual­i­fi­ca­tions, followed by a lack of or obstruc­tive legal frame­work conditions.

Green added value, brown discount

There are still many good reasons for invest­ing in “green prop­er­ty”.  After all, they not only help protect the climate. A study²by ImmoScout24 and the Bundesver­band energieef­fiziente Gebäude­hülle e.V. (BuVEG) from 2022 shows that ener­gy-effi­cient build­ings are also partic­u­lar­ly profitable:

• Prop­er­ties with low ener­gy consump­tion achieved on aver­age 22 % high­er sales prices than compa­ra­ble prop­er­ties with poor build­ing envelopes. At the peak, prices were up to 35 % higher.
• Ener­gy-effi­cient prop­er­ties in two age cate­gories achieved partic­u­lar­ly good compar­a­tive values: Old build­ings built up to 1949 with a 25 % high­er value and new build­ings from 1991 to 2018 with a 23 % high­er value.

The study analysed 155,000 resi­den­tial prop­er­ties and compared them accord­ing to loca­tion (city, surround­ing area, rural region) and build­ing age cate­gories. “Ener­gy-effi­cient­ly modernised build­ings are not only crucial for signif­i­cant­ly more climate protec­tion. They are a key factor in increas­ing the value of a prop­er­ty,” said Jan Peter Hinrichs, Manag­ing Direc­tor of BuVEG, summaris­ing the results

The afore­men­tioned RICS study¹comes to simi­lar conclu­sions: almost half of the partic­i­pants esti­mate the added value of sustain­able build­ings to be high­er than that of compa­ra­ble, non-sustain­able prop­er­ties; accord­ing to 44%, the same applies to corre­spond­ing rental income. It is also worth noting that around a third of partic­i­pants do not charge a premi­um for sustain­abil­i­ty, but esti­mate a “brown discount” on value or rents for non-sustain­able properties.

Bloom­ing views in the verti­cal garden

A new dimen­sion of sustain­abil­i­ty aris­es from the idea of plant­i­ng roofs and — partic­u­lar­ly strik­ing — façades. This exter­nal green­ing comple­ments prop­er­ties that are already designed to be sustain­able to create an “XXGreen prop­er­ty” — with numer­ous mone­tary bene­fits^{(3) (/) (4)}:

• as an archi­tec­tur­al enhance­ment, e.g. by visu­al­ly high­light­ing parts of the façade, to struc­ture or indi­vid­u­alise the build­ing and to create natur­al spaces for balconies and loggias;
• as addi­tion­al ther­mal insu­la­tion at high and low outside temper­a­tures and by reduc­ing wind cooling;
• as noise protec­tion, rain­wa­ter stor­age and by improv­ing biodiversity;
• as a natur­al protec­tive shield against driving rain, hail and UV radiation;
• as a biophilic factor for a better qual­i­ty of life and well-being through to phys­i­o­log­i­cal effects such as lower­ing blood pres­sure and reduc­ing stress for users.

XXGreen not only increas­es the value of the build­ing and opti­mis­es the ener­gy and oper­at­ing cost balance, but also gives the prop­er­ty an attrac­tive, sustain­able image. The market­ing of the prop­er­ty in partic­u­lar bene­fits from the posi­tive image of a “verti­cal garden”. Although there are still too few such build­ings for direct compar­isons, a Dutch study⁵is already show­ing promis­ing results: Green exte­ri­or facades on shops attract more customers and can increase sales by up to 12%

How your oppor­tu­ni­ties grow with XXGreen

The large-scale green­ing of roofs and façades is a valu­able invest­ment in the future of a prop­er­ty that pays off in the long term with numer­ous bene­fits. Initial­ly, a certain amount of addi­tion­al work is required — for exam­ple, for suit­able contain­ers, a water supply for dry peri­ods and a budget for regu­lar green main­te­nance. A new, root-resis­tant exte­ri­or render may have to be applied to exist­ing build­ings in order to opti­mal­ly protect the build­ing fabric. Howev­er, there are already projects that are specif­i­cal­ly research­ing cost-effec­tive solu­tions for this, such as the one by Frank­furt-based DGJ Architek­tur for the “Wohn­Werk Mannheim eG” coop­er­a­tive, described in issue 1.2024 of “Quarti­er” maga­zine.

Exte­ri­or green­ing should also not be used as a “fig leaf” for green­wash­ing. An XXGreen concept can only be effec­tive as a market­ing and price argu­ment if the prop­er­ty is demon­stra­bly ener­gy-effi­cient and sustain­able. Howev­er, if the visu­al appear­ance and figures are right, the combi­na­tion of a sustain­able build­ing and creative green­ing offers good market­ing oppor­tu­ni­ties even in diffi­cult markets.

List of sources

• “RICS sustain­abil­i­ty report 2024”, Royal Insti­tu­tion of Char­tered Survey­ors (RICS), London 2024
• “Increas­es in prices and demand for ener­gy-effi­cient prop­er­ties in Germany in 2022”, ImmobilienScout24 on behalf of the Bundesver­band energieef­fiziente Gebäude­hülle e.V. (BuVEG), Berlin 2022
• “Facade green­ing in city centres — approach­es for Karl­sruhe in an inter­na­tion­al compar­i­son”, Lilian Span­nagel (Karl­sruhe Univer­si­ty of Educa­tion, Insti­tute of Biol­o­gy and School Garden Devel­op­ment), Karl­sruhe 2021
• “Poten­tials of build­ing envelopes to reduce heat gener­a­tion and improve air qual­i­ty in an urban context”, Fraun­hofer Insti­tute for Build­ing Physics IBP on behalf of the German Feder­al Asso­ci­a­tion for Ener­gy-Effi­cient Build­ing Envelopes (BuVEG), Stuttgart 2017
• “Groene winkel­ge­bieden goed voor mens, natu­ur, klimaat en economie” (Green shop­ping areas good for people, nature, climate and the econ­o­my), Konin­klijke Verenig­ing van Hove­niers en Groen­voorzieners (VHG), 2020

(Image source: istockphotos)