As energy-efficiency becomes a question of survival, built-to-suit developments are the only way forward
With harsh increases in energy prices being environmentally friendly – and efficient – gains a new level of attractiveness for industrial real estate. Upgrading current facilities to meet today’s challenges is not always the best option, as it can get both an expensive and lengthy project (or even an impossible one). The most rational (faster and often cheaper) alternative is moving into built-to-suit facilities.
Comparing older and, from the first glimpse, cheaper facilities with built-to-suite, the latter has a clear advantage of better fitting tenants’ business demands and even strategic goals. Many European companies have already moved towards Net Zero Emmisions, having it as a horizontal strategic target covering a wide range of business activities and departments.
“When talking with potential international built-to-suite clients, there’s an increased focus on solar and geothermic energy, a fleet of electric vehicles and much more complex energy-efficient solutions than just installing LED lights”, – comments Vytautas Bakšinskis, the Real Estate Fund Manager of INVL Asset Management, the parent company of INVL Baltic Real Estate. “All these requirements are increasingly represented in technical specifications and the ability to meet those demands can make or break the deal. Even if fully implemented solutions for energy efficiency are more expensive, now, when electricity and gas costs have increased several times, the return on investment becomes much faster – 3-5 y instead of the 8-10 y that was expected only a year ago.”
Mr V. Bakšinskis gives an example of Dommo Grupa, a company managed by the real estate investment company INVL Baltic Real Estate and developing a 58-hectare logistics and industrial park near Riga, Latvia. Dommo Logistics & Industrial park offers A class built-to-suite property of various volumes in the range of 2,500 – 50,000 m2 which meets all client’s needs and requirements for modern logistics or industrial property. It already has a built-in road, utility infrastructure and an approved master plan that fast-tracks the development process. Then, the in-house property management team makes sure that a property is developed following the highest quality standards and meeting all the tenants’ requirements. As a result, it takes only 12-16 months to develop modern, energy-efficient, operations-ready facilities for tenants to move in.
In Latvia, the energy performance of buildings is regulated according to EU requirements and the goal is to continuously move towards NZEB – Net Zero Emission Buildings. Currently, the NZEB definition of NZEBs in Latvia is 45 kWh/m2 threshold for non-residential buildings and is a lot closer to the cost-optimal level than previously.
According to the regulations, a building shall be classified as an NZEB if it meets all the following requirements:
- The building energy performance indicator corresponds to Class A by concurrently ensuring conformity of indoor climatic conditions with the requirements of the laws and regulations in the field of construction, hygiene and labour protection.
- The total primary energy consumption for heating, domestic hot water supply, mechanical ventilation, cooling and lighting accounts for no more than 95 kWh/m2.year.
- High-efficiency systems are used in the building, which ensures:
- recovery of no less than 75% of the ventilation heat loss during the heating season;
- the, at least partial, use of RES (RES>0).
- There is no low-efficiency fossil fuel heating equipment installed in the building.
Dommo Logistics & Industrial park is located in the centre of the Baltics, just a few kilometres from the Latvian capital Riga and close to the junction of the A8 motorway and the A5 bypass, it provides a major strategic advantage for any business interested in the region and seeking energy-efficient development.