More restrictive ESG policies likely from banks: Berlin Hyp

ESG will be increasingly important when financing office properties and more often will be a risk factor that must be assessed by banks and the valuation community, according to Berlin Hyp’s head of international real estate finance Assem El Alami.

“It’s going to be increasingly difficult to fund properties that are not ESG compliant and I think the core of the investment community is thinking about how to transform retrofit office buildings,” he said.

“That’s where climate change will be fought in commercial real estate,” he stated, adding that banks will also have more restrictive policies.

But ESG regulation demands clarity and while some countries such as the Netherlands are clear about which energy labels are acceptable, Germany and France have more complex regulation.

“Inevitably, it runs down to taxonomy compliance. The European taxonomy is evolving and it’s getting clearer every year,” El Alami said.

Please click on the video above to watch the full interview or listen to the podcast below.