Market Focus
Net Zero Properties primarily invests in income-producing German real estate with resilient, downside-protected fundamentals. We target assets where our active asset management, operational improvement and targeted capital expenditure can unlock embedded value. We avoid assets requiring excessive capital expenditure and structurally high vacancies.
The German residential market is driven by various secular tailwinds:
- Persistent housing undersupply: Germany continues to face a significant structural housing deficit, with the cumulative shortfall projected to reach approximately 1.2-1.7 million homes by 2027.
- Structurally low vacancy: limited housing availability supports sustained rental demand and rental growth that has historically outpaced CPI, reinforcing resilience through market cycles.
- A predominantly rental market: approximately 54% of German households rent their homes, giving Germany one of the lowest homeownership rates in Europe and creating a deep, established rental market.
- Increasing household fragmentation: one and two person households have grown by c.20% over the past 25 years, reinforcing structural demand for rental housing.
Energy Efficiency
Energy performance is central to the investment case and is tailored to the tightening regulatory backdrop surrounding German residential assets. The predominant portion of existing German housing stock performs below required standards. To this end, the Manage-to-Green strategy reduces energy consumption, extends asset life, and neutralises brown discounts, crystallising green premium valuation benefits and future-proofing assets against regulatory-driven obsolescence.
Turning Strategy into Action
Case study in Stuttgarter Straße, Remscheid
| Metric | When acquired | Performance (Phase 1) | Net Zero (Phase 2) |
|---|---|---|---|
| Energy consumption (kWh/(m²·a)) | 151 | 121 | 40 |
| EPC rating | E | C | A |
| CO₂ emissions (kgCO₂/(m²·a)) | 33.0 | 26.0 | 0.3 |
| Stranding point | 2030-2033 | Before 2045 | Future proof |
| Flow temperature | 70 °C | 53 °C | 53 °C |
Two-Phase Programme
Phase One establishes a measured baseline and captures a 15-25% reduction in energy consumption. Phase Two delivers decarbonisation and a further 50-60% reduction in energy consumption.
Target Energy Performance
Circa 75% of the portfolio is targeted at EPC A-C within 24 months, on an externally verifiable standard.
Oversight and Execution
The investment management team sets the overall blueprint strategy whilst the on-site asset management teams deliver the works. Offices in Düsseldorf, Munich and Luxembourg.