Empira Group, the Switzerland-based institutional real estate investment firm, yesterday announced the launch of its Transition to Green Fund, which will focus on upgrading and improving the ESG credentials of residential assets in Germany’s top eight cities.
“A prosperous housing market that is also committed to sustainable principles is the foundation of our transition-to-green strategy,” said Lahcen Knapp, Empira’s founder and chairman of the board. “We see a future in which high-quality housing and affordable rents are not mutually exclusive.”
Against the backdrop of the EU’s “Fit for 55” initiative, the new fund intends to make use of possible state subsidy programmes and utilise these as part of its investment policy in order to reduce the investment costs in equity and at the same time increase the value of the properties.
“Current market conditions and the price adjustments for non-sustainable buildings offer a rare double-dip pricing opportunity, allowing investors to invest in the future of German cities at an optimal time,” said Knapp.
The group’s transition-to-green strategy specifically addresses under-managed properties in the top eight cities and metropolitan regions in Germany. Measures such as window replacement, roof insulation, and modernisaton of heating systems will upgrade the energy efficiency of these properties, while active rental management will increase their value and reduce vacancy rates.
In view of the steadily increasing demand for affordable housing and the growing decarbonisation requirements for German residential real estate, the fund aims to sustainably transform existing housing stock in those top eight cities and metropolitan regions, while optimising rental structures to promote positive cash flow.
“Without decarbonising the existing housing stock, the ambitious German and European climate targets for the building sector will not be achievable,” said Knapp. “Our vertically integrated platform efficiently integrates costs into rental structures and thus directly promotes positive cash flow.”
The goal is to optimise the portfolio to reduce energy consumption, extend the economic life of properties, and implement sustainable measures that increase long-term value.
“We are at a critical turning point,” he said. “With the transition-to-green strategy, we offer investors a unique opportunity to enter the residential property market just when prices are bottoming out and awareness of sustainable buildings is growing.”