Bucharest's green-certified real estate project owners may receive tax incentives starting next year

2019 could bring a series of significant changes on the Romanian real estate market, and it could be a year of transformation taking into account the most important trends regarding the green certification segment.

”At the beginning of this segment’s development, 10 years ago, obtaining a sustainable certificate was in most cases a marketing decision for office project developers. But in recent years and at this moment it has become a cost efficiency method – be it shopping centres or factories – a mandatory criteria for selecting an office building and a method for increasing the value of a real estate asset. And the sustainable development principles will be binding for all of us in the near future,” explains Razvan Nica, BuildGreen’s managing director, the leading consultant in the field of sustainable building design, development and certification in Romania.

Thus, 2019 will be mainly characterized by the changes that developers, no matter the destination of their projects, will have to implement in order to minimize their impact on the environment and the occupants of the buildings.

The EU 2020 Strategy targets a 20 percent reduction in greenhouse gas emissions compared to 1990, a share of 20 percent energy produced from renewable sources and a 20 percent increase in energy efficiency. The long-term objective is to reduce greenhouse gas emission by 100 percent until 2050 and to decarbonise the entire stock of buildings that account for 36 percent of the EU’s total carbon dioxide emissions.

Compliance with these new regulations, which will become mandatory for all buildings delivered after 2020, can be done through a higher efficiency of the equipment implemented in the buildings, by installing high-performance air conditioning and ventilation solutions and using solutions and principles such as natural light orientation, efficient insulation and natural ventilation.

The widespread use of sustainable development principles for newly constructed buildings will be doubled in 2019 by the significant increase of ”In Use”/”Operational & Maintenance” certificates for projects already delivered.

This increase will be recorded in the context in which the owners of these projects, delivered over five years ago, want to remain competitive for potential tenants to new, more efficient and attractive projects. Thus, this could lead to a tripling of green certificates issued as more and more commercial centres or office buildings will undergo extensive renovation works, according to BuildGreen data.

Increasing emphasis on the welfare and comfort of employees through the implementation of the WELL certification principles will be completed in 2019 by the spread of fit-out certificates, which represent a certification of the rented space and how the tenants arrange it. ”You can have a well-developed house according to the rules of sustainable development, and a tenant who arranges it in a totally ineffective manner, partially cancelling the benefits of the building itself,” adds Razvan Nica.

The fittings and technical solutions for noise reduction, an increased brightness and a performant ventilation system are the most commonly used solutions for cost reductions and a significant increase in comfort for the occupants.

2019 and the following years will also bring a spread of sustainable development principles on the residential segment and more and more residential projects will obtain a sustainable certificate, an effective way to clearly certify the quality of a project as compared to other projects without a green certificate.

The development of the sustainable certification field could lead in the near future to the extension of tax incentives offered to green project owners in Bucharest. At this moment, the owners of sustainable developed projects in Cluj-Napoca, Iasi and Timisoara benefit from reductions up to 50 percent of the annual property taxes, a feature that could be also adopted in Bucharest.

Last but not least, 2019 could also bring the first BREEAM Outstanding certificate for a project in Romania, the highest level of certification existent for this scheme. At this moment, for LEED certification scheme are several Platinum levels obtained – the highest level existent on LEED scheme.

All these trends will manifest in a general context in which the Romanian real estate market is becoming more mature, which will also be achieved through an increase of the number of sustainable certificates obtained for industrial and logistic projects and the widespread of WELL and EDGE certifications.

All these changes will occur after over 30 projects obtained a sustainable certificate in 2018 in Romania according to BuildGreen data, the company being involved in over half of these projects, from Unirii View and The Mark office projects to the new Arctic factory from Targoviste.

The company was involved in the sustainable certification process of over 150 real estate and industrial projects, accounting for approximately 3.7 million square meters and an overall investment value of approximately EUR 6 billion.

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