Manage to Green: Potentials and Options for Action in Digital Building Management

"Manage to Core" properties, i.e., buildings with increased development potential for repositioning, revitalization, and conversion, are considered attractive investment opportunities. At the same time, these properties often have an increased probability of sustainability-related losses in value due to their age. Without appropriate measures, there is a risk of devaluation. These so-called "stranded assets" are properties that lose so much value due to their poor performance that they can no longer participate in the investment market.

Those who already have the right strategies in place today, therefore, have a clear advantage. In the words of Jens Böhnlein, Global Head of Asset Management and Sustainability at Commerz Real: "No Manage to Core without Manage to Green". We show what requirements this concept places on real estate and why the cloud platform for digital operational optimization should be the foundation of any "Manage to Green" strategy.  

What Actually is a "Green" Building?

The requirements for the acquisition and operation of sustainable buildings are diverse. The properties should not only comply with legal requirements but also be highly competitiveand offer stable returns. They must be energy-efficient, and offer added social value that goes beyond the mere use of space. In addition to the implementation of so-called "green" leases and the active involvement of users inthe process of sustainable real estate development, a well-thought-out digitalization strategy is also essential (smart building readiness). Building data should be available around the clock and used throughout the entire lifecycle of the property. There is a consensus in the industry that this expanded understanding of sustainability includes not only climate protection aspects but also socially responsible business practices and responsible corporate governance in the sense of the ESG trilogy.

A holistic approach to the topic is paying off. A survey conducted by PATRIZIA shows a clear trend toward increasing value through active asset management with a particular focus on decarbonization and the collection of ESG data. Against this backdrop, Union Investment, one of the largest investment companies in Europe, introduced the Sustainable Investment Check (SI Check) back in 2009 as a vital tool in its in-house “Manage to Green” strategy. The rating system covers qualitative sustainability criteria from various categories that a property must meet in order to be considered for purchase, including data availability, operational measures and user comfort.

The ecological and economic benefits of sustainable real estate development can, therefore, no longer be denied. However, the question of concrete implementation often needs to be answered. So where do owners start and how can they successfully put their "Manage to Green" strategy into practice?

No "Manage to Green" Without "Manage to Digital"

In the search for solutions, cost-intensive individual measures such as insulating the building envelope or replacing windows and glass surfaces are usually discussed, particularly when it comes to increasing energy efficiency. These measures undoubtedly contribute to decarbonization. However, the core problem - the inefficient operation of the building, e.g., due to incorrectly set heating, cooling, and ventilation systems - needs to be addressed first. Software solutions for digital operational optimization have proven to be an effective tool for mapping this process holistically - from automated data acquisition and recommendations for action to predictive control based on operating data, weather forecasts, and room occupancy.

The benefits of this approach can be illustrated using a recent report published by Colliers, and adding empirical values from the aedifion cloud platform. According to Colliers, the exemplary office building, built between 1995 and 2005, and with a usable area of 12.000 m², can be regarded as a typical reference property for numerous real estate portfolios in Germany. There is an urgent need for action in order to achieve the goals of the Paris Agreement and meet the associated requirements. According to the decarbonization pathway defined in the Carbon Risk Real Estate Monitor (CRREM), the building would notionally be considered a "stranded asset" as early as 2026. The following analysis outlines and compares various decarbonization measures related to the building envelope and technical equipment in terms of their costs and impact on CO₂ emissions.

In this example, the total costs of the individual measures amount to around EUR 3.7 million with an annual savings potential of 576 tons of CO₂. Suppose we add digital operational optimization with the aedifion cloud platform to the recommended building automation retrofit. This would include not only automated room temperature and lighting control, but also AI-based analysis and predictive control of HVAC technology. In that case, it quickly becomes clear that the cloud platform can add additional value in terms of both costs and benefits. With a monthly license fee of only EUR 0.10/m² and an assumed usage period of 21 years (2024 - 2045), the total cost of using the cloud platform would be only EUR 25.2/m². Based on the assumed net energy consumption of the reference building and the underlying CO₂ emission factor, the use of the innovative technology could save up to an additional 105 tons of CO₂ per year - minimally invasive and without investment, only through data analysis and control with artificial intelligence. The collected building data then serves as a reliable basis for decisions on further retrofit measures, as described in the graphic below. Early implementation of predictive, digital building management should therefore always be the first step on the road to energy-efficient real estate.

Unlike one-time investments in building retrofits, which are characterized by technical and physical dependencies, license fees for the aedifion cloud platform can be included in operating costs and, under certain conditions, passed on to tenants. In addition, the software solution can be easily integrated into any building through open interfaces and delivers measurable results. If a technical retrofit of the building automation system is required, it must be added as an extra item in the cost breakdown. In our example, this item is already included in the package “building automation”.

The Cloud Platform as a Game Changer for Sustainable Real Estate Development

Our conclusion: If you want to pursue a successful sustainability strategy for your portfolio, there is no way around using the cloud platform for digital operational optimization. The advantages are obvious:

Data Availability: The software enables manufacturer-independent data access to all building automation components via standard, freely configurable interfaces. Owners gain full sovereignty over their portfolio and can optimally exploit the potential of their assets.

Efficient Operation: The software can reduce energy consumption, CO₂ emissions, and operating costs by an average of 22 percent and, in some cases, by as much as 40 percent. Operators are empowered to perform their jobs more efficiently and report back to asset management.

Fulfillment of Compliance Standards: In addition to an improved indoor climate, tenants benefit from increased service and security standards in the building, as well as data-based transparency and participation models. Sustainability reporting to investors and certification bodies is based on reliable key figures and makes the development potential of a property transparent at an early stage.