Investigating Energy Renovation of Multi-Owner Buildings and Real Estate Market Issues in a Degraded Greek Urban Area
Abstract
:1. Introduction
Use of the Buildings | ||||
---|---|---|---|---|
Construction Period | Detached Houses | Apartment Buildings | Retail | Offices |
1920–1940 | 220,345 | 178,479 | 11,264 | 4632 |
1941–1960 | 281,732 | 331,165 | 5428 | 3720 |
1961–1980 | 661,485 | 904,893 | 12,909 | 10,517 |
1981–2000 | 676,573 | 773,626 | 18,649 | 11,186 |
2001–2010 | 242,222 | 284,339 | 16,963 | 21,316 |
2011–2020 | 34,350 | 42,319 | 743 | 1694 |
Energy Efficiency Category of Buildings 1 | Classification to Categories | Classification to Categories |
---|---|---|
A+ | ΕΡ < 0.33RR | T < 0.33 |
A | 0.33RR < ΕΡ < 0.50RR | 0.33 < T < 0.50 |
Β+ | 0.50RR < ΕΡ < 0.75RR | 0.50 < T < 0.75 |
Β | 0.75RR < ΕΡ < 1.00RR | 0.75 < T< 1.00 |
C | 1.00RR < ΕΡ < 1.41RR | 1.00 < T< 1.41 |
D | 1.41RR < ΕΡ < 1.82RR | 1.41 < T < 1.82 |
E | 1.82RR < ΕΡ < 2.27RR | 1.82 < T < 2.27 |
F | 2.27RR < ΕΡ < 2.73RR | 2.27 < T < 2.73 |
G | 2.73RR < ΕΡ | 2.73 < T |
Climate Zone | Energy Consumption per Building Use | ||||||||
---|---|---|---|---|---|---|---|---|---|
Residential | Retail | Offices | |||||||
AAEC 1 | RBC 2 | ESP (%) 3 | AAEC 1 | RBC 2 | ESP (%) 3 | AAEC 1 | RBC 2 | ESP (%) 3 | |
A | 248.50 | 94.39 | 62.01 | 451.69 | 234.9 | 47.99 | 356.82 | 198.92 | 44.25 |
B | 265.75 | 103.56 | 61.03 | 492.34 | 253.18 | 48.58 | 372.40 | 212.36 | 42.97 |
C | 353.08 | 142.23 | 59.72 | 534.77 | 251.59 | 52.95 | 394.99 | 214.62 | 45.66 |
D | 392.49 | 147.31 | 62.47 | 574.45 | 250.08 | 56.47 | 409.22 | 211.08 | 48.42 |
1.1. Literature Review
1.2. Research Questions
- (RQ 1) Can the MO of buildings affect the decision making for their deep renovation?
- (RQ 2) Can the efficient utilization of state aid available for energy upgrading of MOBs be achieved through the operation of the real estate market?
- (RQ 3) Can urban planning strengthen the efforts for the deep energy upgrade of MOBs in Greece?
2. Methodology Approach
- An extensive field survey was carried out in order to record the state of the building stock in the area and to assess the need for deep renovation, the costs of which were determined. Deep renovation is considered to be the restoration of the building to a new condition with a deep energy upgrade, without special technical or architectural interventions.
- To highlight the effects of MO on decision making for the deep renovation of buildings (RQ 1), the ownership status (number and legal status of the co-owners) was investigated by the use of cadastral data. It was considered and explained that a high number of owners per building creates unfavorable conditions for the achievement of a common decision from the multiple owners, given the issues arising from the existing legal framework that were also investigated. For the visualization and better monitoring of the prevailing situation, the data obtained from surveys A and B were recorded in a database and thematic maps were produced using a geographical information system.
- In order to investigate the effects of the applied state aids on the economic performance and the attractiveness of the deep renovation of the MOBs (RQ 2) for the market, 11 preliminary case studies of building restoration were carried out based on a purpose-elaborated PPP scheme for the deep renovation of MOBs. Their construction plans were searched and examined, autopsies were carried out in order to determine their state of maintenance, and the need and cost of projects for their deep renovation were estimated. Real estate market data were also sought and used and the cost of the necessary renovation works was estimated. By the use of a discounted cash flow analysis, useful conclusions were reached on the financial viability of the renovation projects.
- The possibilities offered by the institutional framework of urban planning in Greece were investigated in order to strengthen the deep renovation effort of the building stock in the study area, both to address the issue of the decision for the deep renovation of the MOBs and to improve the economic performance and attractiveness (RQ 3) and thus enhance the effort for the energy upgrade of the building stock.
2.1. Data Collection
2.1.1. Ownership Status of the Buildings
2.1.2. State of the Building Stock
2.1.3. Real Estate Market Data
- (i)
- Their location in the urban fabric. Their location is such that the upgraded building could easily attract users;
- (ii)
- Their state of repair, together with the percentage of vacant properties within them. Usually, but not necessarily, a significant number of vacant properties indicates the poor state of maintenance of the building;
- (iii)
- The availability of the original construction plans and building permits. These data are extremely valuable in order to evaluate construction characteristics and estimate the cost of restoration and energy upgrades with much greater precision compared to the mass evaluation of the buildings carried out in the previous stage A of the research. This criterion was crucial because the absence of these elements led to the exclusion of two-thirds of the buildings initially selected (see annex I).
3. Context: The Building Stock of the Athens City Center
4. The MOBs Issue
4.1. Legal Entanglements of the Management of MOBs
5. Can the Real Estate Market Support the Energy Renovation of Buildings? (RQ 2)
5.1. A Public–Private Partnership Scheme
5.2. Real Estate Market Data
5.3. Appraisal of the Projects of Deep Renovation
- (i)
- The estimated revenue of the building after its energy renovation (expected mean potential gross income) is based on a market survey, for each use of the building, as usually, buildings host residential or office uses together with retail stores. Valuation methods of PGI: use of the direct capitalization method and comparative method [75], adapted to the formation of the final value using coefficients of 30% and 70%, respectively. Data based on local market research, mean asking prices as of September 2023, weighted by building condition, location, and architectural and construction quality. For the expected mean PGI, values are calculated by considering prices of similar properties in the broader area. It refers to the first operating year of the building by its tenants after renovation (2 years later);
- (ii)
- The deep renovation costs are estimated based on the surveys of the buildings and the official energy upgrading costs for the Athens area (climate zone B) defined by ministerial decision [4], including the costs of required studies and consulting services. The evaluation of the renovation works is calculated with the use of a matrix, according to banking standards and current practice (Table 4). The constructor’s profit margin and the investor’s profit on the total cost are set at 20% each, as it is the current practice in such areas;
- (iii)
- The financial costs, according to the terms for state aid provision through the financial economic instruments already set by the Greek state, as well as the costs of loans with market terms (Section 5.1), more precisely, the provisions of Regulation EC/1303/2013 (as amended) of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, as well as the decision regarding the JESSICA Holding Fund [68] for Greece have been applied, especially those concerning eligible expenditures. The duration of the FEI loan and the commercial loan are 15 and 12 years and the rates are set at 2% and 8%, respectively, according to the current regulations (state aid funds) and banking practice.
- (iv)
- The operating costs of the SPV company, the maintenance costs of the building, and other costs, such as the cost of compensating commercial users who will have to be removed during the works, when they are of significant extent, is included and calculated according to the provisions of L. 4242/2014.
6. Can Urban Regeneration Enhance the Real Estate Market and Regulate the Multi-Ownership Issue?
The Need to Invoke ‘Public Interest’ to Regulate the MO Issue
7. Conclusions
Originality and Limits of the Study
- It presents for the first time, as far as I know, a problem for the investigation of the issue of energy upgrading of MOBs, based on the simultaneous consideration of the ΜO status of buildings and the inefficient functioning of the real estate market in degraded urban areas, where there is a great need to address economic and social problems;
- It promotes the perception that addressing the issue of MO can cause not only the deep renovation of MOBs but also the energy transition and reorganization of cities through the implementation of urban regeneration programs, when the institutional framework supports addressing the issue of multi-ownership, as in the case of Greece at least.The main limitations of the study are:
- The study is subject to the legal framework applicable in Greece in relation to the management of buildings and urban planning;
- The data of the real estate market and the cost of deep renovation of the buildings used are subject to unpredictable continuous changes.
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
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Part of the Building | Participation to the Construction Cost (%) | % of Renovation | % of the Upgrade Works |
---|---|---|---|
Body structure | 30 | 20 | 6 |
Masonry works | 7 | 50 | 4 |
Hydraulic network | 5 | 100 | 5 |
Electrical network | 5 | 100 | 5 |
Coatings | 5 | 80 | 4 |
Dyes | 7 | 80 | 7 |
Floors | 10 | 100 | 6 |
Frames | 8 | 60 | 8 |
Insulation (based on requirements of current thermal insulation regulations) | 5 | 100 | 5 |
Roof | 2 | 100 | 2 |
Heating–cooling | 5 | 100 | 5 |
Elevator | 3 | 100 | 3 |
Equipment | 8 | 100 | 8 |
Sum | 68 |
Case Study Number (See Figure 6) | Building Use | Total Gross Floor Area (m²) | Year of Building License Issuance | Rate of Renovation (%) State of Maintenance | Ownership Status (%) | Vacancy Rate (%) (2014 Q2) | Renovation and Energy Retrofit Total Costs (€/m²) (2023 Q3) | % of the Energy Retrofit Costs | ||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Physical Persons | Legal Persons | Public Sector Entities | Number of Owners | Ground Floor | Upper Ground Floors | |||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | ||
1 | Office | 3401 | 1962 | 51.2 | 58.4 | 24.0 | 17.6 | 125 | 33.3 | 75.00 | 1052 | 34 |
2 | 5821 | 1961 | 43.0 | 97.2 | 1.7 | 1.1 | 178 | 0.0 | 66.00 | 935 | 38 | |
3 | 1829 | 1978 | 38.5 | 86.5 | 13.5 | 0.0 | 37 | 50.0 | 21.93 | 495 | 57 | |
4 | 4160 | 1959 | 54.4 | 98.5 | 0.0 | 1.5 | 195 | 85.7 | 54.08 | 985 | 36 | |
5 | 3265 | 1964 | 53.5 | 77.8 | 3.4 | 18.8 | 117 | 20.0 | 48.81 | 876 | 41 | |
5a | Case of converting the office building into a residential building | 990 | n/a | |||||||||
6 | 2850 | 1970 | 50.0 | 0.0 | 100 | 0.0 | 2 | 75.0 | 100.0 | 893 | 40 | |
6a | Case of converting the office building into a residential building | 1034 | n/a | |||||||||
7 | Residential | 2824 | 1951 | 49.4 | 95.6 | 4.4 | 0.0 | 23 | 25.0 | 25.00 | 755 | 35 |
8 | 3815 | 1959 | 43.4 | 98.2 | 0.0 | 1.8 | 55 | 80.0 | 47.00 | 763 | 35 | |
9 | 1895 | 1965 | 50.8 | 100.0 | 0.0 | 0.0 | 30 | 0.0 | 22.00 | 619 | 43 | |
10 | 1419 | 1963 | 48.8 | 91.6 | 2.8 | 5.6 | 36 | 0.0 | 24.50 | 660 | 40 | |
11 | 2046 | 1966 | 50.5 | 100.0 | 0.0 | 0.0 | 41 | 100.0 | 40.00 | 660 | 40 |
Case Study Number (See Figure 6) | Building Use | Total Gross Floor Area (m²) | Year of Building License Issuance | Rate of Renovation (%) | Expected Mean PGI (€/m²/month), after Renovation, (Pretax) | IRR (%) (Pretax) | Payback Period | ||
---|---|---|---|---|---|---|---|---|---|
Retail | Offices | Flats | |||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
1 | Office | 3401 | 1962 | 51.2 | 16.5 | 7.5 | - | 9.0 | 15 |
2 | 5821 | 1961 | 43.0 | 23.6 | 8.5 | - | 5.7 | 17 | |
3 | 1829 | 1978 | 38.5 | 12.7 | 5.4 | - | 12.0 | 11 | |
4 | 4160 | 1959 | 54.4 | 11.3 | 8 | - | 9.1 | 15 | |
5 | 3265 | 1964 | 53.5 | 15.8 | 5.5 | - | 7.4 | 15 | |
5a | Conversion to residential building | 15.8 | - | 9.3 | 9.0 | 14 | |||
6 | 2850 | 1970 | 50.0 | 11.3 | - | 6.0 | 6.5 | 16 | |
6a | Conversion to residential building | 11.3 | - | 10.5 | 10.1 | 13 | |||
7 | Residential | 2824 | 1951 | 49.4 | 17.4 | - | 8.4 | 12.6 | 12 |
8 | 3815 | 1959 | 43.4 | 10.6 | - | 8.4 | 12.3 | 13 | |
9 | 1895 | 1965 | 50.8 | 13.9 | - | 8.6 | 13.9 | 11 | |
10 | 1419 | 1963 | 48.8 | 8.9 | - | 6.3 | 11.3 | 13 | |
11 | 2046 | 1966 | 50.5 | 11.2 | - | 8.4 | 12.1 | 13 |
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Triantafyllopoulos, N. Investigating Energy Renovation of Multi-Owner Buildings and Real Estate Market Issues in a Degraded Greek Urban Area. Sustainability 2024, 16, 2903. https://doi.org/10.3390/su16072903
Triantafyllopoulos N. Investigating Energy Renovation of Multi-Owner Buildings and Real Estate Market Issues in a Degraded Greek Urban Area. Sustainability. 2024; 16(7):2903. https://doi.org/10.3390/su16072903
Chicago/Turabian StyleTriantafyllopoulos, Nikolaos. 2024. "Investigating Energy Renovation of Multi-Owner Buildings and Real Estate Market Issues in a Degraded Greek Urban Area" Sustainability 16, no. 7: 2903. https://doi.org/10.3390/su16072903