Embodied energy: It does not always have to be new construction

GARBE is aware of its ecological, social and economic responsibility.

We, therefore, implement the ESG concept in all corporate decisions. We follow the thesis that, in many cases, it is more resource-efficient to invest in older existing properties and to continue to operate them instead of always aiming for a new building or demolition/new construction.

What does this thesis look like in reality? The GARBE Research has calculated the life cycle assessments of existing developments and new buildings. The input parameters are largely based on building information from the current GARBE portfolio.

Existing vs. new construction of logistics properties – a comparison of the life cycle assessment

If a prospective tenant requires an area of around 30,000 m² of hall within a large conurbation, the following options are available

• New construction of a modern, certifiable hall, state of the art, on a previously undeveloped site (greenfield) around 50 km from the conurbation.
• Demolition/new construction of an existing property within an established commercial area in the conurbation (brownfield). The new building being constructed also meets the most modern criteria in terms of utility value and certification standards.
• Use of an existing property within an established commercial area, which in principle meets the requirements, even if individual aspects may no longer be up-to-date.
• Remediation of the existing property, whereby it is significantly upgraded in terms of energy efficiency, but the utility value remains identical in principle.

Which approach is ecological and sustainable here? The decision criterion is the CO₂ of these four options. On the one hand, the so-called embodied energy contained in the buildings is taken into account, i.e. the primary energy required to construct a building. On the other hand, the consumption energy is used, which includes the CO₂ emissions generated by the electricity and heating requirements.
The ecological assessment of a hall is based on the CO₂ behaviour of the property over a period of time – for example, the use of 20 years. The starting point is the beginning of use. All energy consumption figures are converted into tonnes (t) of CO₂ equivalents p.a. and accrue annually. The embodied energy (also in tonnes CO₂ equivalents) is only incurred once at the starting point of the analysis.

Furthermore:

• A new building initially generates primary energy expenditure (embodied energy) – this is offset by reduced consumption energy during the period of use, e.g. due to better insulation values.
• A demolition/new building is based on the basic assumptions of the new building. Also, demolition measures cause CO₂ emissions. In total, however, the CO₂ contribution is slightly negative, among other things due to material recycling, and is marginally better than for new construction on a greenfield site.
• The existing building also caused CO₂ during its construction phase, but this was far in the past. New emissions are avoided. The embodied energy from the historical construction phase flows neutrally “sunk costs” into the calculation model. On the other hand, CO₂ consumption is increased, for example, due to comparatively poorer insulation values.
• When remediating the existing property, certain energy parameters are optimised. This mainly concerns electricity consumption, which can be reduced by installing LED lamps, for example. The historical CO₂ footprint can also be disregarded in the renovation of existing buildings.

The following diagram shows that the CO₂ equivalents are calculated over a useful life of 20 years after the start of use. The question is at what point the life cycle assessment of different buildings shifts in favour of another.

Saved grey energy: the life cycle assessment speaks in favour of refurbishment

Refurbished and unrefurbished halls have a starting advantage due to the neutral embodied energy of the construction phase. Both new building variants, on the other hand, initially generate embodied energy, i.e. the curves already start with a “CO₂ overhang”. It takes between eight and nine years for the higher energy efficiency of new greenfield construction to have a positive impact on the life cycle assessment. The life cycle assessment of demolition/new construction is even marginally better due to the recycling of materials during demolition. Otherwise, both development options behave identically. The life cycle assessment of a remediated existing property performs best over the 20-year period under consideration. Only after that would it be reasonable to assume that the CO₂ footprint of the two new construction options would be ecologically amortized and perform better than a renovation property.

Many other aspects must be considered in the decision-making process, including:

• Usability of the property: built-to-suit vs. “as the hall stands and lies”
• Traffic emission: New construction on distant greenfield vs. used but central
• Land Policy: New sealing of land vs. land conservation
• Economic efficiency: Land and construction prices, rent levels and much more.

All investment and development options are offered

For specific area-related questions, GARBE offers all real estate options. Together with our tenants , their space requirements are assessed for sustainability in both ecological and economic terms. The same applies to our investors, to whom we successively offer investment products geared to ESG guidelines.