Financing real estate projects can be one of the most difficult obstacles, especially at a time when banks are reluctant to provide loans. At the same time, there has been an increasing housing shortage in the Netherlands for a number of years. What funding options are available? What role does sustainability play in this? And what fits best to your project or initiative? At Sustainable Capital Group (SCG) we are happy to help you realize a tailor-made financing.
First of all, it is important to analyse the sustainability level of the project. For investors and financiers, this is an increasingly important part of their decision, and projects that prioritise sustainability are more likely to be eligible for certain green financing. For example, you can benefit from more attractive interest rates or even government guarantees or real estate subsidy, which covers part of the investments. An assessment of possible additional sustainability investments is also important, in order to check whether they will increase the value or attractiveness of the project.
The most well-known real estate certification is the internationally acknowledged BREEAM-NL label. BREEAM-NL assesses buildings on 9 different sustainability categories, in order to give a complete insight into a project when it comes to sustainability. Besides BREEAM-NL, there are also other certifications that chart sustainability within the real estate sector, such as LEED, GPR and GreenCalc+. How do you find out which certification best fits a particular project and, more importantly, how do you add value using this certification?
Five different subsidy schemes
The advantage of real estate certifications is that they are often linked to government subsidies or green financing. The RVO (Rijksdienst voor Ondernemend Nederland) now has 5 different subsidy schemes, each with its own target group, available subsidy amount and a list of conditions to be met. In this way, a compensation is available for different types of sustainability investments. For projects that go a step further, there is the green declaration. A scheme in which a green bank can offer a loan at a lower interest rate.
However, all these possibilities can also cause a lot of confusion. When exactly does a project or investment meet a certain contribution? Are you also entitled to other subsidies? And is the contribution actually in proportion to the higher initial investment for the developer? These are questions that we often hear, which indicates that there are still (too) many ambiguities around this topic.
An increasingly common option is the issue of green bonds. This market plays an important role in financing projects that contribute to a sustainable environment. It offers a sustainable investment opportunity for investors. From the investor side, there is a lot of demand for such bonds. Issuing these bonds is doable with the right guidance. The ‘Green Bond Principles’ are created to give clarity when a bond can be considered sustainable and gives issuers more insight into the guidelines that all need to be taken into account. At Sustainable Capital Group, we work with these guidelines because we see sustainability as a priority, not an afterthought.
If you would like to know more about green bond principles, go to our other article.
Are you curious what possibilities are of interest to you or would you like to know more about a specific guideline, subsidy scheme or quality mark in the field of sustainable real estate? Please contact us.