Mátyás Gereben, country manager of CPI Property Group Hungary

“It starts with new buildings being obliged by the rules to be more energy efficient, to cope with 2020 European Union regulations by law,” Gereben explains.

All new buildings constructed after 2020 will have to meet EU standards for high energy performance and incorporate renewable energy sources to meet the nearly zero energy building (known in the industry as NZEB) standard imposed by the European Commission.

“At the same time, many of the asset holders, the investor funds that have buildings from five, ten, or 15 years ago, have to stay competitive over how energy conscious a building is. Tenants are also taking these measures into consideration. Third, and perhaps most important, is how we as developers and landlords see our buildings, from an energy conscious point of view.”

Gereben says energy consciousness is “definitely moving up the table” in terms of priorities for tenants, and that is reflected by the fact that all new office buildings in Budapest come with some form of green accreditation, usually from the two biggest organizations, BREEAM and LEED. The public recognition of such certification is an important part of how developers “convince the market and tenants about being energy conscious”, he adds.

“The second stage is what we are trying to do as new developers apart from green certificates. CPI, as asset managers and building operators, are looking at our buildings from top to toe, trying to understand how each building works as a whole mechanically. You look at a building as a living organism, almost, an integrated environment reacting with the weather, its own control systems, and the use the tenants make of it.”

Data Harvesting

It might seem counterintuitive, but this is easier to achieve with a new building, because it can be designed to include more (and more accurate) sensors and input devices. That allows building operators to “harvest the data” and understand how tenants are using their offices. That, in turn, enables operator and tenant to discuss how to use space to optimize the building in terms of energy efficiency. You might discover, for example, that space on the sunny, naturally lighter southern side of a building is being underutilized, or that more shading is needed in some areas, or less air conditioning at certain times at others.

The level of detail depends on the number of data collection sources, which is why it is much easier to collect from new buildings. Unfortunately, for older constructions, you cannot simply install more points. “The building management systems in most cases were simply not designed to deal with all that data, so that would require the whole system to be replaced, which is a huge investment.”  

That points to a need for developers to try and “future proof” their projects as much as possible. But how a building is used also evolves as the tenant mix changes.  

“What does ‘being green’ mean; how does that meet with tenants requirements?” Gereben asks. “Right now we have more and more Millennials in the workforce, which means more people coming to work by bike, so we are creating more bike racks and shower rooms in our buildings. But we have to plan these steps: how are we serving the individuals coming into our buildings, how can they, and us, be more energy conscious. That’s what we are thinking through. What are these steps, and what makes a building greener?”

CPI is a relative newcomer to the Hungarian scene, having come to the market in 2014 through purchasing an existing real estate portfolio. Currently its mix is 90% existing assets and 10% under construction. Gereben and his team are, therefore, spending a lot of time on rehabilitating the older buildings, with the first refurbished project handed over last year.  

“Even in an older building you can install solar panels, just as you can use drain water for irrigating the garden, or turn paved areas into green spaces.” Those spaces can also be used for outdoor gyms or, if installed with Wi-Fi, breakout areas, or simply a place for quiet relaxation.  

Exercise Charging

One example of reclaiming space for alternative, social use is the addition by CPI of five or six exercise bikes in the lobby area of some of its buildings where tenants (or indeed people coming in off the streets) can get away from their work station and exercise for a few minutes. The novelty feature is that your mobile phone can be plugged into the bike and, while you exercise, it charges, using the energy you generate.

The latest addition to the developer’s Balance project which includes the refurbished Balance Office Park and Balance Loft, is Balance Hall, currently under construction and part of CPI’s “Conscious Building” brand. Gereben says the idea is to develop a brand that represents the way smart technology, energy efficiency, social spaces and tenant use all interconnect and influence one another.  

It is due to be completed next September and will feature sustainable mechanical solutions, energy saving systems, electric car charging, water saving, and selective waste collection. It will be sound proof and heat insulated, with windows that can be opened, a modern VRV system, and innovative lighting. “Due to the conscious, energy-efficient operation of the office building, the operating expenses will be significantly lower,” Gereben says.

Cost still matters, of course. Some ideas sound nice, but may not yet be practical. Even given the abundance of thermal water in Hungary, Gereben says the technology does not allow its use as an energy source for heat, at least for now.

“In our portfolio we have one building over a thermal water deposit. We have had long discussions about how we can utilize that for heating or other services for visitors, but so far we have not been able to do so.”

Over time, technology will improve and costs come down, Gereben says, and there may also be funding available from EU and governmental bodies.

“In Hungary today, there is no broad debate shaping the current system; it does not support green consciousness from a visibility point of view. In other countries, especially in Scandinavia and Iceland, you can find 60-70% green energy funding. Hopefully that will change here.”