The property sector must explore new avenues in order to return to profitable development and investment under changing market conditions. A new marketing brief from Rohrer Immobilien demonstrates how this can be achieved. At Expo Real, the company was awarded the brief to sell a residential complex comprising 130 flats in a Bavarian university town.
Developed by a project developer and property developer, the property is based on a largely energy-self-sufficient building concept devised by Prof. Dipl.-Ing. Timo Leukefeld and an innovative flat-rate rent model. By combining energy self-sufficiency, simplified building services and modular construction, a net initial yield of around four per cent is achieved. What makes this project special is that, according to the project developer, the energy concept enables a higher achievable basic rent of around 16 per cent, or 2.50 euros per square metre. At the same time, residents benefit from a flat-rate rent model that makes housing and energy costs easier to calculate, without placing an additional burden on tenants.
“The property sector has long been waiting for falling interest rates and rising prices to make the old business models profitable again. But we cannot rely on that. We need to rethink property and improve its profitability through intelligent concepts,” said Sven Keussen, managing partner of Rohrer Immobilien. “This project demonstrates precisely that: energy self-sufficiency is not just an environmental approach, but also creates measurable economic added value. A 16 per cent increase in the basic rent and a net initial yield of around four per cent are factors that are sure to attract the attention of investors in this prime location.”
Energy becomes part of the business model
The project is based on the concept of largely energy-self-sufficient buildings developed by Leukefeld. Rather than relying solely on external energy supplies, the buildings generate and store a large proportion of their own energy requirements. At the same time, the building services have been deliberately and radically simplified and are virtually maintenance-free. Combined with a flat-rate rental model, this changes the economic calculation for the property. Whilst energy is primarily regarded as a cost factor in traditional residential properties, this approach transforms it into an integral part of the revenue model. Greater independence from external energy suppliers enables new rental models and provides additional financial flexibility. At the same time, residents benefit from greater planning certainty regarding their ongoing living costs.
When it comes to the technical design of such all-electric building concepts, 3lectrify acts as a partner at the interface between energy planning and building services engineering. The company combines photovoltaics, battery storage, electric heating and hot water systems, and smart energy management into a coordinated, integrated solution. The aim is to create a technical infrastructure that is as simple as possible, reducing both investment and operating costs whilst simultaneously laying the groundwork for the flat-rate rental model with an energy flat rate. In this way, the approach developed by Leukefeld is transformed into a commercially viable building concept.
Another key to success is the modular construction method. It helps to make construction processes more efficient and to keep production costs down. It is only the combination of construction method, energy concept and letting model that enables the desired cost-effectiveness to be achieved in the 2,000 residential units that have already been completed.
From discussions at Expo Real to a concrete contract
Rohrer Immobilien had already highlighted the topic of energy self-sufficiency at Expo Real, in collaboration with Leukefeld. Under the theme ‘Rethinking property – energy self-sufficiency, value retention and new business models’, the company discussed new approaches to economically viable property with investors and project developers.
The marketing contract now awarded for 130 flats shows that these ideas are already being put into practice time and again in specific projects. “The crucial question is no longer when the old world of property will return, but what solutions will enable us to succeed under today’s conditions,” emphasises Keussen. “We do not need further theoretical debates on transformation, but business models that work in practice. The project demonstrates that economic viability, a sustainable energy supply and attractive housing options can be combined. For us, this is an important step towards bringing such concepts to market in collaboration with project developers and investors.”
Rohrer Immobilien sees considerable potential for the future development and marketing of residential property in the combination of innovative energy concepts, new letting models and cost-effective construction methods. For long-term investors in particular, such projects offer tangible alternatives to conventional new-build schemes which, from a strategic perspective, will remain dependent on external energy suppliers and their supporting industries for a very long time to come.
