Great Sustainability Gains Possible for the Real Estate Sector in the Netherlands

How well does the average investor know the condition and risks of their commercial real estate portfolio? And are they ready for the future? These are just a few of the topics discussed by Hans van Brakel, co-owner of C2N, with Vastgoedjournaal.

C2N, founded in 2004 as a project management firm for international clients active in the Netherlands, added Technical Due Diligence and sustainability consulting to its portfolio within two years of its founding.

Market Divide

“The past two years have been particularly special for C2N,” says Van Brakel. “With the outbreak of the COVID-19 crisis, we saw a divide in the investor market. After the announcement of the first lockdown, some investors immediately shut their doors, especially those in hotel real estate. But at the same time, other investors emerged who assessed the risks differently and began a buying spree. The transaction volume in certain sectors skyrocketed, partly due to the low-interest rates, and with it, our already substantial volume of assignments.”

Technical Due Diligence

C2N’s Technical Due Diligence (TDD) activities primarily involve data room research and physical building inspections during real estate transactions. Van Brakel explains: “We assess the condition of the property for investors and identify any technical risks related to deferred maintenance, defects, and non-compliance with regulations.”

Project Management and Sustainability

In addition to conducting TDDs, C2N is built on two other key pillars: project management and sustainability consulting — often combined — for new builds, renovations, and redevelopment projects.

Regarding the latter, Van Brakel says: “We’re seeing a significant increase in the number of ESG (Environmental, Social, & Governance) reports we produce for our clients. It’s now clear to real estate parties that sustainability is here to stay. Tools like GRESB, CRREM, and the EU Taxonomy are increasingly defining under what conditions sustainable investments can truly be classified as such. This is helping to prevent greenwashing.”

ESG

“Previously, the acquisition process included legal, fiscal, and technical aspects. Now, ESG guidelines are an added part of that. This forces real estate owners to think ahead and critically ask questions like: What can be done with a property now, and what will be possible in the future? Does it align with the sustainability strategy of my portfolio?”

“Some of our clients already have a clear vision of how they want to approach things. Others start with C2N on a blank canvas.” Investors are increasingly viewing non-sustainable properties as a risk.

Having an ESG report is a tangible guide for sustainability that contributes to the marketability of real estate.

Still Much to Gain

Measurable sustainability is becoming more important. Van Brakel is optimistic about the coming years. “Sustainability is getting the attention it needs to drive change, and parties who recognize this early have an advantage. We are now seeing transactions fall through because properties don’t meet investors’ ESG targets, and this trend will only strengthen in the coming years.”

Want to know more? Feel free to contact Hans van Brakel.

h.vanbrakel@c2n.nl

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