immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Immobilienfinanzierung

  • Core statements of the research paper “Sustainability in the mortgage business

    Core statements of the research paper “Sustainability in the mortgage business

    The importance of mortgages to achieve the 2050 climate targets

    1. The building sector is a major contributor to energy consumption and CO2 emissions, so sustainable retrofits and energy-efficient design are necessary to achieve the 2050 climate targets.
    1. Mortgages are crucial for energy retrofits and efficiency improvements of buildings. By aligning mortgage terms with sustainability goals, banks and lenders can incentivise owners to green their properties and thus contribute to achieving climate goals.
    1. Within the framework of self-regulation, banks undertake to create better incentives for more sustainability in the areas of loan-to-value, affordability, amortisation and interest rates, especially for private owners. A large proportion of mortgages are granted to private owners.

    The role of private owners

    1. Private owners are fundamentally worse off in terms of sustainability compared to institutional owners, although for a long time the problem was at the level of “will”. Increased energy prices and interest costs, as well as increased regulation and public interest, have likely increased willingness.
    1. Cognitive barriers need to be broken down through comprehensive advice in order to increase the renovation rate among private owners. Many owners do not realise that sustainability can be financially rewarding as it can lead to higher occupancy rates, rental income, lower operating costs, higher liquidity and lower risk premiums, which in turn increases the value of the property.
    1. Financial barriers need to be removed to increase the rate of renovation among private owners. Attractive mortgage conditions can ultimately persuade them to act after readiness and education.

    Offering green mortgages

    1. Mortgage financing that financially rewards and encourages sustainable behaviour already exists and is integrated into the product offerings of many lenders. There is currently no standard taxonomy and various certificates are used to classify sustainability.
    1. Green mortgages include advantageous terms but can be criticised for inefficiencies and potential greenwashing. In addition, positions and environmental impacts are rarely communicated externally.
    1. Lenders that are actually engaged can finance their lending of green mortgages by issuing green bonds and thus be more efficient and transparent. In doing so, they also increase their competitiveness and enhance their credibility.

    What should be expected as a private owner?

    1. Owners should be aware that green practices can increase property values in different ways, while less sustainable buildings risk becoming stranded assets due to future regulatory measures and market changes.
    1. In the future, an improved database and more accurate tools may allow for a more precise recording of CO2 emissions and grey energy of real estate, which would lead to more efficient and symmetrical pricing in lending. This would allow green properties to be financed at more favourable conditions, while non-green properties might receive less favourable conditions.

    More detailed info at www.avobis.ch/wp-content/uploads/esg-im-hypothekargeschaeft_final.pdf

  • Subordinated real estate loans

    Subordinated real estate loans

    Subordinated loans as a complement to traditional financing
    In Switzerland, private real estate debt is increasingly establishing itself as an alternative form of real estate financing. This is mainly because structural changes in the traditional credit market and stricter regulations have led to traditional mortgage institutions becoming increasingly reluctant to lend capital. Private Real Estate Debt supplements the classic mortgage and is aimed at small and medium-sized real estate developers, among others, who are finding it increasingly difficult to obtain financing from traditional sources. Real estate companies and private property owners use this financing solution for reasons of yield optimization, freeing up capital and as a source of liquidity for asset reallocation. In any case, the financing is secured with subordinated promissory notes from Swiss real estate.

    The advantages for investors
     A regulated way is opening up for investors to invest in mortgage-backed loans. Credit checks and project security are of the utmost importance. Thanks to regular interest payments, the asset class has a fixed-income character related to the Swiss real estate market and only a low correlation to the stock markets.

    About Property One
     Property One is an independent, owner-managed group of companies owned by private shareholders, consisting of the public limited companies Property One Partners AG, Property One Investors AG and Property One Ticino SA. It provides services along the entire real estate value chain. The group combines the four business areas of investment management, development and planning, marketing and real estate family office under one roof. Property One combines real estate expertise with knowledge of financial investments. To date, credit requests exceeding an annual volume of CHF 1 billion have been processed. And so far, several hundred million francs in subordinated loans have been granted. The company employs over 40 real estate and finance specialists at the locations in Zurich, Zug and Ascona.

    CTA: Learn more about Private Real Estate Debt.

    The information in this document has been prepared with the greatest care and to the best of our knowledge, is intended solely for informational purposes and does not constitute investment advice. Opinions and assessments contained in this document are subject to change and reflect the point of view of Property One Investors AG (POI). No liability is assumed for the correctness and completeness of the information. Past performance is not an indicator of current or future development. This document is marketing material.