Costs and benefits for the investor
Costs and benefits for the investor
Institutional investors hold an average of approximately fourteen years in their office portfolio. While the economic life thirty to forty years. The RAD wield even depreciation method as the hull of sixty years. The relatively short period of fourteen years is due to Western culture where improved technology firms achieve greater economic value than old offices. The investor would thus by periodic enhancements to keep buildings in the market. This requires additional investment. These additional investments are short term, a profitable operation and eventual sale as possible. Reinvest in real estate for most parties is a financial consideration. To determine whether sustainable renovation is profitable for investors, each item will be a business case to be made. This should be demonstrated or the sustainability of existing and vacant properties is profitable for the investor. The financial model of the business case is the following model schematically.
The model provides the following benefits again:
• Sustainable (additional) investment provides an extended life and an appreciation of the
property.
• The gross yield (BAR) will be lower than after the preserving the BAR purchase, as the risks are reduced and letting increases. This will justify an additional investment.
• Better detectability. The increased comfort of the object leads to a tenant counterproductive of the employees.
• Better re-letting after the end of a lease.
• Green financing is possible after an improvement in a factor0, 6 on the energy label. This means a rate cut of about 1 to 1.5 percent.
• A lasting image for the investor.