Ecology More Sensitivity for Precious Resources

Since the real estate industry is a major contributor to global CO2 emissions, it has a public responsibility to actively help achieve the Paris Climate Accord goals. Accordingly, the issue of reducing every form of energy consumption along the entire real estate value chain has gradually moved centre stage in recent years. All things considered, the industry harbours tremendous potential to contribute to the sustainable development of our society. DIC Asset AG and its stakeholders prioritise efforts to reduce our environmental impact and to optimise the efficiency of our property management.

A good way to identify potential for technical and operational improvements is to collect and analyse data on electricity, heating energy and water consumption as well as on greenhouse gas emissions. To make the annually gathered data on the environmental impact of the properties under our management truly comparable, we use an analysis portfolio. The data thus obtained serve as basis for planning our future efforts to optimise the energy management of our properties.

Our Principles of Environmental Sustainability:
  • Energy and cost-effective management of the real estate under our management
  • Long-term measures for portfolio properties and property developments
  • Optimisation and reduction of CO₂ emissions and resource consumption

Analysis Portfolio

The addition of a given property in the analysis portfolio presupposes that data covering a three-year period are available for at least eight of nine consumption data points. Their availability ensures a sufficiently high data quality. The higher the quality of the data pool, the more accurate are the insights that we can derive concerning sustainable and efficient property operations and the easier it becomes to develop, together with our tenants, suitable approaches for optimising the energy efficiency of our properties. Our objective is to cover as much of the real estate inventory included in the analysis portfolio as possible.

By the end of 2019, the Commercial Portfolio of DIC Asset AG comprised 93 properties with around 842,000 sqm of lettable area under management. The analysis portfolio as of this key date included 65 properties with a gross lettable area of around 589,000 sqm, which equals roughly 70% (previous year: 73%) of the directly held portfolio assets. The drop in floor area percentage during the reporting year of 2019 is due, inter alia, to increased buying activities during the 2019 financial year, because no consumption data for a three-year period are yet available for the assets added to the portfolio in 2019.

In addition to the consumption data of the analysis portfolio, we gather the consumption data of DIC Asset AG itself at its head office in Frankfurt and its seven regional branch offices in Germany. The seventh of these branches, located in Cologne, opened for business in late 2019.

Scope of Estimates

Although we strive to make our analysis as comprehensive and precise as possible, we sometimes rely on qualified assumptions and simplifications when analysing data. We will brief you on the steps of the calculation and the scope of the evaluated data in the respective section of the report and in the annex.

Measuring Consumption

The evaluated data of our reference portfolio cover the period 2017 through 2019.

We use the consumption data from the reference portfolio to determine average values for our reporting purposes. The process allows for the fact that differences in a building’s use will influence the measurements: Properties running their own data centres and cooling systems in continuous operation, for instance, will obviously average a higher energy consumption. Properties with a larger proportion of storage space or without their own cooling system, by contrast, tend to consume significantly less energy. Each type of use can be assigned specific square-metre ratios in accordance with the German Energy Saving Ordinance (EnEV) and guidance by the IWU Institute for Economy and Environment. At present, our analysis portfolio breaks down into 25 categories some of of which are summed up in the table below. Each of these categories is assigned a label for the building-related type of electricity consumption (e.g. lighting, air conditioning, ventilation) in accordance with the EnEV, a label for user-dependent electricity consumption (e.g. operation of PCs, printers, servers) in accordance with the IWU guidance, and a label for the heating type in accordance with the EnEV.

The comparison of actual consumption data per square metre and associated labels allows us to undertake an asset-specific benchmarking, which we then use in collaboration with our tenants to make the operation of the respective property as efficient as possible.

Generally speaking, the average overall parameters (2017–2019) of our analysis portfolio (electricity 78.7 kWh / sqm / year, heat 96.8 kWh / sqm / year) are confirmed by comparable parameters in accordance with the EnEV and IWU standards (weighted by floor area percentage for our analysis portfolio – electricity 79.8 kWh / sqm /year, heat 92.5 kWh / sqm / year).

The reference portfolio includes the following types of floor space (aggregated representation):

Types of use in the analysis portfolio*
Types of use Floor area (in thousand sqm) Floor area percentage

Office units without A/C

167

28.3%

Retail units, supermarkets, department stores

125

21.3%

Storage and archive area, plant building

106

18.1%

Office units with A/C

88

15.0%

Higher and continued education institutions

51

8.7%

Hotels

27

4.5%

Restaurants, cafés, cafeterias

8

1.3%

Residential units

7

1.3%

Server rooms

4

0.7%

Special use units

3

0.5%

Doctors’ offices

2

0.3%

Total

588

100.0%

* The categorisation of floor areas follows the recognised system of the Building Classification Catalogue (BWZK) of the Working Group of the Ministers and Senators of the Länder Responsible for Building, Housing and Settlement (ARGEBAU) and the German Energy Saving Ordinance (EnEV) 2009.

In the consumption categories of heating energy and water, we generally have access to the consumption bills submitted by the utility companies. In addition, meter readings for these media are available for most properties from our facility management service providers.

The biggest challenge in measuring the environmental impact lies in the comprehensive determination of electricity consumption per property because the majority of our tenants conclude their own supply contracts. For us as owner, it may seem easy to aggregate the consumption of common-area electricity in analogy to the consumption data for heating energy and water. However, to obtain as complete a picture as possible – tenant-consumed electricity data included – we depend on detailed meter readings by our facility management service providers and the cooperation of network operators and our tenants. We are striving to improve the data collection and evaluation in the future by installing intelligent meter systems (“smart metering”) in this context (see digression Smart Metering).

In addition to the overall view, we carried out a like-for-like examination of the analysis portfolio for the years 2017 through 2019. The like-for-like analysis only included properties that were part of the portfolio in all of these three years. This eliminates the effects that property acquisitions and sales during the observation period could have.

We refrained from using any methodological adjustments in the evaluation that would neutralize effects possibly caused by a change in use type for a given rental accommodation, the development of vacancies in the real estate portfolio, different material specifications and the age of buildings, or external influences such as weather conditions.

Breakdown by year built*
in % of the lettable area of the analysis portfolio

* In cases of extensive refurbishments/modernisations: Year of the Most Recent Modernisation

Breakdown by size
in % of the lettable area of the analysis portfolio

Smart Metering

In late 2019, DIC Asset AG launched a smart metering project through its fully-owned subsidiary DIC Onsite GmbH. Within the group of companies, the platform of DIC Onsite GmbH is responsible for the facility management, lettings, property management and property development …

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Trend in Consumption Data

Energy

CRE1 GRI 302-1 GRI 302-2 GRI 302-3 GRI 302-4 Energy-Int Elec-Abs Elec-LFL DH&C-Abs DH&C-LFL Fuels-Abs

Electricity
Indirect electricity consumption
in kwh/sqm
annual consumption
3-year average

For the evaluation of electricity consumption during the period from 2017 through 2019, the reference portfolio accounted for about 70% of the Commercial Portfolio as of 31 December 2019.

In 2019, the absolute electricity consumption of the assets in our analysis portfolio rose to 45.7 million kWh (2018: 42.6 million kWh). This is attributable to 43% to an increased electricity consumption in shared areas (stairwells, multi-storey car parks, etc.) to 8.3 million kWh (2018: 7.0 million kWh) and to 57% to increased consumption of tenant electricity up to 37.4 million kWh (2018: 35.7 million kWh).

Relative to the lettable area, energy consumption in 2019 increased by 7.1% to 77.6 kWh/sqm (2018: 72.5 kWh/sqm) but still remained below the three-year average value of 78.9 kWh/sqm.

A like-for-like analysis of 65 properties shows that, compared to the benchmark year of 2017 (51.0 million kWh), the electricity consumption dropped by 10.4% to 45.7 million kWh in 2019.

Heating
Indirect heating energy consumption
in kWh/sqm
annual consumption
3-year average

For the period 2017 through 2019, we were able to establish the heating energy consumption of an average 69% of the lettable area in the Commercial Portfolio as of 31 December 2019 based on consumption bills on record and the consumption data made available by tenants.

The absolute heating energy consumption of the assets in our analysis portfolio totalled 53.4 million kWh in 2019 (2018: 55.1 million kWh).

Relative to the floor area, this translates into a 5.2% decrease to 90.7 kWh/sqm (2018: 95.6 kWh/sqm).

On a like-for-like basis, the heating energy consumption in 2019 amounted to 51.9 million kWh. This implies a decline by 12.8% from the figure of 59.6 million kWh measured for the benchmark year of 2017.

When comparing the heating energy consumption rates over time, you principally need to take the fluctuating lengths of the heating periods in the years analysed into account as an external influencing factor. A subsequent plausibility check is based on heating days and degree day figures that are calculated by the IWU on the basis of the German Weather Service’s climate station data in accordance with recognised guidelines.*

* Source: Institute for Economy and Environment (IWU) –
https://www.iwu.de/publikationen/fachinformationen/energiebilanzen/#c205

Water

CRE2 GRI 303-1 Water-Abs Water-LFL Water-Int

To determine the water consumption for the analysis period of 2017 through 2019, we analysed an average of 70% of the Commercial Portfolio’s lettable area as of 31 December 2019. To this end, we used meter reading lists, utility bills and notifications by our tenants (in cases where water supply contracts are handled directly by the tenants).

The absolute water consumption in our analysis portfolio equalled 174,948 cbm in 2019 (2018: 190,987 cbm). Relative to the floor area, this implies a rate of 0.30 cbm/sqm (2018: 0.32 cbm/sqm).

Our like-for-like comparison revealed a 4.8% drop in consumption, from 183,712 cbm in the benchmark year of 2017 down to around 174,856 cbm in 2019.

Water consumption
cbm/sqm
annual consumption
3-year average
CO₂ Contribution

gri 103-1 gri 103-2 gri 103-3

The consumption of energy releases greenhouse gases that are among the main drivers of climate change. We have set ourselves the goal to minimise greenhouse gas emissions. To reduce our carbon footprint, we pursue several approaches:

  • Since 2010, our common-area electricity supply in the properties rented by us for office use comes from renewable, carbon-neutral energy sources (green electricity).
  • We ask third-party agencies to compile energy balances for our business premises so as to determine the exact consumption as well as any potential for improvement.
  • We promote the use of carbon-neutral long-distance service connections of Deutsche Bahn for our employees’ business travels.
Energy supply
Share in total consumption
Natural gas
District heating
Fuel oil

The direct and indirect heating energy supply of our properties is based on three energy sources, these being district heating, natural gas and fuel oil, with natural gas accounting for the bulk of it at 60.3%.

For each energy source, we use the following specific conversion factors to calculate the CO₂ environmental contribution of the energy consumed:

  • District heating: 225.0 g CO₂e/kWh*
  • Fuel oil: 280.0 g CO₂e/kWh*
  • Natural gas: 191.9 g CO₂e/kWh*
  • Electricity, national average (if utility provider is unknown): 590.0 g CO₂e/kWh*

* Source: International Economic Forum for Renewable Energies (IWR) – http://www.iwr.de/re/eu/co2/co2.html

GRI 305-4

Indirect CO₂ emissions

In 2019, the CO₂ emissions caused by electricity and heating energy consumption increased by 5.3% to a total of 32,923 tCO₂e (2018: 31,261 tCO₂e). Relative to the lettable area, this implies a decline in CO₂ emissions by 4.5% to 55.9 kgCO₂e/sqm (2018: 53.5 kgCO₂e/sqm).

But like-for-like, emissions in 2019 came to 32,651 tCO₂e and thus 11.0% less than in the benchmark year of 2017 (36,668 tCO₂e).

Indirect CO₂ emissions/year
3-year average

CRE3 GHG-Int

Consumption of a typical property in the Commercial Portfolio
Ø 2017–2019 per year per sqm and year

Electricity consumption (kWh)

714,638

78.9

Heating energy consumption (kWh)

876,768

96.8

CO₂ emissions (kgCO₂e)

520,231

57.4

Water consumption (cbm)

2,821

0.31

* The typical property size is 9,058 sqm, based on the lettable area and the number of properties held in the Commercial Portfolio at year-end 2019.

Absolute consumption data*
2019 2018 2017

Indirect electricity consumption (kWh)

45,662,146

42,649,025

50,987,713

– thereof common-area electricity

8,276,435

6,986,039

11,924,475

– thereof tenant electricity

37,385,711

35,662,986

39,063,238

Number of analysed properties

65 out of 93

65 out of 93

65 out of 93

implies a lettable area in sqm

588,577

588,577

588,577

Indirect heating energy consumption (kWh)

53,355,049

55,054,270

60,949,886

Number of analysed properties

65 out of 93

64 out of 93

64 out of 93

implies a lettable area in sqm

588,577

575,802

586,021

Indirect CO₂ emissions (kgCO₂e)

32,922,775

31,261,362

36,931,542

Water consumption (cbm)

174,948

190,987

183,797

Number of analysed properties

65 out of 93

64 out of 93

65 out of 93

implies a lettable area in sqm

588,577

587,805

588,577

* relative to the analysis portfolio

GHG-Indir-LFL

Like-for-like consumption data*
2019 2018 2017 Change since 2017

Indirect electricity consumption (kWh)

45,662,146

42,649,025

50,987,713

-10.4%

Number of analysed properties

65 out of 93

implies a lettable area in sqm

588,577

Indirect heating energy consumption (kWh)

51,940,698

55,039,357

59,578,698

-12.8%

Number of analysed properties

63 out of 93

implies a lettable area in sqm

573,246

Indirect CO₂ emissions (kgCO₂e)

32,650,792

31,258,007

36,668,358

-11.0%

Number of analysed properties

64 out of 93

Water consumption (cbm)

174,856

190,987

183,712

-4.8%

Number of analysed properties

64 out of 93

implies a lettable area in sqm

587,805

* relative to the analysis portfolio

Key ratios*
2019 2018 2017 Change since 2017

Indirect electricity consumption (kWh/sqm)

77.6

72.5

86.6

-10.4%

kWh/workplace**

1,241

1,159

1,386

Number of analysed properties

65 out of 93

65 out of 93

65 out of 93

Indirect heating energy consumption (kWh/sqm)

90.7

95.6

104.0

-12.8%

kWh/workplace**

1,450

1,530

1,664

Number of analysed properties

65 out of 93

64 out of 93

64 out of 93

Indirect CO₂ emissions (kgCO₂e/sqm)

55.9

53.5

62.8

-11.0%

kgCO₂e/workplace**

895

857

1,005

Water consumption (cbm/sqm)

0.30

0.32

0.31

-4.8%

cbm/workplace**

4.8

5.2

5.0

Number of analysed properties

65 out of 93

64 out of 93

65 out of 93

* relative to the analysis portfolio

** average workplace in 7 major German cities, around 16 sqm (source: Cushman & Wakefield “Office Space Across the World” 2017)

Extrapolation for the Commercial Portfolio

Based on the consumption data of our reference portfolio, we extrapolated the consumption of our entire directly held portfolio for the period 2017 through 2019. This makes it easier to establish the actual overall environmental footprint of DIC Asset AG.

Portfolio Projection
2019 2018 2017

Floor area of the Commercial Portfolio, in sqm*

842,349

888,426

911,600

Electricity consumption

in kWh/sqm

77.6

72.5

86.6

Total consumption, in kWh

65,349,938

64,376,450

78,970,823

– thereof common-area electricity

11,844,921

10,545,057

18,468,873

– thereof tenant electricity

53,505,012

53,831,393

60,501,949

Heating energy consumption

in kWh/sqm

90.7

95.6

104.0

Total consumption, in kWh

76,359,129

84,945,245

94,812,126

Total energy consumption

in kWh/sqm

141,709,668

149,321,695

176,782,949

Water consumption

in cbm/sqm

0.30

0.32

0.31

Total consumption in cbm

250,378

288,663

284,669

CO₂ emissions in tCO₂e**

47,210

48,998

54,864

* not including property developments and warehoused assets

** CO₂ emissions from tenant-consumed electricity (conversion factor using the national average of 590 gCO₂e/kWh) and heating energy

Eco-Balance of DIC Asset AG

During the 2019 financial year, DIC Asset AG maintained an average headcount of 247 employees at its seven branch offices in Germany. The one-year increase was essentially driven by the acquisition of GEG in June 2019, and thus by the associated expansion of the workforce in the Asset Management and Investment Management units and the extra floor space requirements. The evaluation of consumption data in the properties we use takes the same methodological approach as the evaluation of our reference portfolio.

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