ESG is a 'gamechanger' for valuers
ESG is a 'gamechanger' for valuers, as was evident during the RICS Valuation Conference on May 22, where various experts discussed the future of real estate valuation.
But of course, it's not just about ESG: One of the main conclusions from the discussion - although not surprising - is that interest rates currently have a strong influence on property values, leading to a correction of more than 25% depreciation. As one of the speakers noted: "Interest is like gravity." Mark Fidler (CBRE) observed that Dutch valuers are responding much more appropriately with depreciations this time than during the 2007/2008 crisis.
The meeting was moderated by Paul Wessels, co-founder of Blue Module.
In addition, it was discussed that the post-Covid-lockdown period, in which remote working has increased significantly, will lead to a different attitude towards office space. This change is already very visible in the United States. Large investors are therefore turning away from offices as an investment.
The experts also emphasized that ESG (Environmental, Social, Governance) will play a decisive role for valuers. In addition to the traditional question, "What is the value of a building?", the question, "What is the sustainability profile of the building?" will increasingly need to be answered. This shift is being driven by legislative developments, particularly within the European Union, and the demand from investors and banks for sustainable real estate.
To meet these new requirements, valuers will increasingly have to rely on ESG experts. At the same time, it is important that they continue to educate themselves in this area, the speakers emphasized.
Another important point that came up during the meeting was the need to reach international agreement on which data points are currently and will be important in the near future. The ESG 'forest' can easily be lost among the trees, so there must be clarity on terms such as Environment, Social, Governance, EU taxonomy, NFDR, SFDR, CSRD, and CRREM.
Finally, it was emphasized that in assessing the energy and CO2 performance of a building, consideration must also be given to its use and the user. While this can be a challenge for real estate valuers, it is an aspect that we should strive for, the speakers said.
These valuable insights were shared by a variety of speakers:
- Aart Hordijk, professor, Tias University
- Mark Fidler, Head of CBRE Valuation and Advisory Services Continental Europe
- Thijs Konijnendijk, Head of Research & Data Intelligence, Capital Value
- Bas van den Griendt, Head of Sustainability Services & ESG, JLL Netherlands
- Devin Ummels, Director, CBRE Valuation
- Tessa Leenders, Business Consultant Valuation Team, ABN Amro
- Marga Boermann-Plugge, Head of Real Estate Advice & Portfolio Management, RNHB
- Jurre Brantsma, partner - Lead V&A Residential, Cushman & Wakefield
- Ron van den Dolder, Head of Valuation Advisory, JLL
- Henk Oosterhout, General Director - Valuation Services, Kroll
- Joel Scherrenberg MBA MRICS REV RT, Chairman of the Dutch Advisory Board, RICS
- Paul Wessels, co-founder, Blue Module.