Current challenges in the real estate __

Current challenges in the real estate
14. June 2023 3 min.

Rising interest rates, inflation, high energy costs or advancing digitalisation, the challenges facing investors and the real estate industry are manifold. The real estate market is in a state of flux. But there are solutions on how to act in this difficult economic environment. Implementing sustainable energy concepts and upgrading existing properties to efficient and energy-saving technologies offer the greatest opportunities. In this blog, we show how investors and the real estate operators can benefit from this.

Where do real estate experts currently see the greatest challenges?

The real estate economy has cooled down in recent months. More and more investors and property owners are faced with the question of how best to act in this situation. CRE (Counselors of Real Estate) has identified ten problem areas:

  1. Inflation and Interest Rates
  2. Geopolitical Risk
  3. Hybrid Work
  4. Supply Chain Disruption
  5. Energy
  6. Labor Shortage Strain
  7. The Great Housing Imbalance
  8. Regulatory Uncertainty
  9. Cybersecurity Interruptions
  10. ESG Requirements Forcing Change

We want to focus on the energy aspects in particular in the blog, as they are very likely to have a long-term impact on the profitability and future security of investments.

 

How should you act in the cooling real estate economy?

In addition to specialising in certain types of real estate and niche markets, such as student flats, daycare centres, and senior citizen facilities, investments in sustainability and energy-efficient renovations currently offer the greatest prospects for success. This also includes digitalisation, which not only means more comfort with smart buildings, but also contributes to the energy transition through intelligent control technology. It is therefore important to concentrate investments on future-oriented unique selling propositions.

 

Seizing future opportunities for the real estate market

While the new construction business is declining, in some cases dramatically, there are future opportunities for investors who invest in sustainable real estate projects. By focusing on energy-efficient refurbishments of existing buildings, attractive investment opportunities are opening up to compensate for the decline in new construction.

Energy-efficient renovations combine several advantages:

  • They reduce high energy consumption.
  • You reduce CO2 emissions.
  • You reduce heating costs and tenants' running costs.
  • They increase property value and attractiveness.
  • They are promoted and optimise the return on investment.

 

Smart buildings are sustainable

Another important driver for sustainable investments in real estate, besides energy refurbishment, is digitalisation. SmartBuildings can monitor and adjust energy consumption in real time. And not only through the automated control of the heating system, but also through the perfect interaction with ventilation and shading solutions, for example, to significantly reduce energy consumption for air conditioning in summer.

Overall, it can be said that sustainability and energy saving are the main drivers for rewarding investments in real estate. Investors who focus on these trends not only improve their returns, but also make a substantial contribution to climate protection. A win-win situation, in other words.

 

Why converting to heat pumps is a worthwhile investment in the long term

 

Many European countries promote the installation or conversion of old heating systems to environmentally friendly heat pumps. The modern systems are a decisive factor in lowering the energy consumption of buildings and reducing CO2 emissions. There are different technologies that can be used depending on the insulation of the house. The two most important are:

  • Air-to-water heat pump
  • Brine-water heat pumps (geothermal),

The correct design of the heat pump for the energy demand of the building is important in the choice. In general, it can be said that a surface heating system in combination with a heat pump achieves the highest efficiency and thus the best energy yield.

Heat pumps

A heat pump powered by clean electricity from the building's own photovoltaics and a panel heating system with a low flow temperature is currently the most sustainable and energy-efficient overall concept.

 

New construction and energy-efficient refurbishment: Which panel heating for what?

Surface heating systems are suitable for both new buildings and energy-efficient renovations. Due to their large surface coverage, they enable a low flow temperature and thus optimum use of the heat pump energy.

New building

In new buildings, panel heating can be installed in the floor, wall or ceiling. Preference is given to underfloor heating systems, as they allow optimum use of the space. However, depending on the room situation, installations in walls and ceilings are also possible.

Renovation of old buildings

In older buildings, retrofitting the underfloor heating system would require a great deal of construction work and expense. Valuable, intact floor covering may have to be removed and replaced. It is therefore cheaper, simpler, quicker and cleaner to install the heating in the wall or ceiling, which is then covered and wallpapered. Experts refer to this as "minimally invasive renovation".

With the appropriate planning and choice of system, the renovation can ideally be carried out room by room while the building is occupied or, in the case of office or administrative buildings, without major interruptions to work processes.

 

 

What added value does panel heating bring for the investor?

Surface heating systems offer added value for investors and users alike: they significantly reduce energy costs, protect the climate and increase the value and attractiveness of the property.

The best example against this background is the aquatherm black product family, which is suitable for installation in floors, walls and ceilings. It is characterised not only by a high degree of efficiency with optimised heat emission, which creates a feel-good climate in the rooms, but also by the dual benefit: aquatherm black can be used as a surface heating and cooling system. This means that cool water is fed through the pipe system in the summer, which enables draught-free and energetically optimal air-conditioning of the rooms.

Conclusion: Understanding challenges as drivers of change

It is unclear how long the tense situation in the real estate market will last. But it also represents an opportunity to accelerate the energy transition and transformation for sustainable solutions. Especially in times of climate change and increasing awareness of sustainability, targeted investments therefore make ecological as well as economic sense.

Learn more about our solution for high-efficiency surface heating here:

AQUATHERM BLACK