Catella Asset Management Oy (Finland) and LeaseGreen have signed a long-term agreement which will see five assets in Finland, comprising 308 homes, swap to geothermal heating. It is estimated that by replacing the existing district heating systems energy costs will reduce by 69% and CO2 emissions by 63%. The properties form part of the Catella Wohnen Europa portfolio.
Iiro Nurkkala, Chief Financial Officer, Catella Asset Management said: “We have seen sharp rises in energy costs and there are few signs that this trend will reverse. At the same time, in the face of climate change, there is an imperative to reduce carbon emissions. This agreement enables us to address both these issues. It will result in a significant reduction in energy costs, while mitigating the energy price risk, and materially reduce CO2 emissions from these properties
The five assets, totalling 26,000 sqm are in Helsinki, Espoo, Kerava and Tampere and comprise four apartment building schemes and one terraced house complex. All were completed in 2011. In addition to the geothermal heating, two of the properties will be fitted with solar energy systems, two will have their lighting modernised and the apartments in one will have cooling systems installed which will use the same pumps and geothermal well that is used to heat the properties.
Benjamin Rüther, Head of Fund Management at Catella Residential IM comments: “District heating systems are an effective and relatively environmentally friendly way to heat homes but there comes a time when we need to see whether there are better ways to reduce or remove a property’s carbon footprint. We believe this time has come, since the ever-increasing rises in energy prices has resulted in geothermal heating systems becoming economically viable and they can be combined with photovoltaic systems to deliver even better results.”
The move to ‘green’ of the Catella portfolio is also becoming a key differentiator for the company’s investors since according to Rüther, it is no longer a just an exercise in ticking boxes but rather the hard maths of property investment value creation: “Some investors are ready to pay a higher price and lower their profit expectations to build a portfolio of low-emission and carbon neutral properties. Lower emissions are already reflected in both the price and liquidity of properties. There are numerous investors who will not invest at all in our funds if sustainability issues are not closely monitored and taken care of.”
Geothermal heating systems, which use the ground as their main source of energy, are growing in popularity as they allow a building to become fully or partly self-sufficient in heat generation. This allows the owner to be protected from increasing and fluctuating energy costs and in the case of properties that are linked to central district heating systems it also removes the additional expense of paying for upgrades or renewals as the infrastructure ages or becomes obsolete.
LeaseGreen’s CEO, Thomas Luther said “In future many more people will consider the climate impact of their property. Smart investors are already anticipating a gradual increase in taxation for high-emission heat sources over the next decade and our mission is to help them at what is a turning point for green energy generation. From start to finish we take care of the entire project, which includes producing a portfolio analysis, identifying profitable solutions, and planning and delivering the project for a fixed price. This project is a great example of what can be achieved - we estimate that emissions in the five Catella properties will be reduced by almost 300 tonnes every year, the same amount of carbon produced by 1,500 return flights from Helsinki to Berlin.”
About Catella Residential Investment Management GmbH (CRIM)
Catella launched its first European residential fund in 2007 with a volume of €1.6 billion and it has since achieved an average net return for investors of more than 9.0% per year until the end of Q2 2021. The team also launched the first dedicated European Student Housing Fund in 2013.
CRIM is a subsidiary of the Stockholm-based Catella AB Group and its residential real estate business comprises portfolio management, acquisitions, sales and asset management. CRIM manages and advises several funds and mandates and has assets under management of more than €5.0 billion across 10 European countries.
For more information contact:
CFO Iiro Nurkkala, Catella Asset Management Ltd.
+358 50 466 8879
CEO Thomas Luther, LeaseGreen
+358 40 534 4256
Lisette van der Ham
Head of PR & Corporate Communications
Catella Residential Investment Management GmbH
Upper West, Kantstraße 164, 10623 Berlin
M: +31 (0)6 83200561