Sustainability of an Investment Portfolio for a Real Estate Fund in The Hague

Renewable Partners supported a real estate fund in The Hague in making an investment portfolio of 30 rental properties with low energy labels more sustainable. With our strategic sustainability reports, we made these homes future-proof, increased their rental value and market value, and prepared them for the future, while complying with the requirements of the Housing Valuation System (WWS) and the Affordable Rent Act. This case study shows how we help investors create sustainable value and optimize their portfolios.

The challenge: Making a portfolio attractive to investors

The real estate fund managed 30 rental properties in The Hague, mainly apartments built between 1950 and 1970, with energy labels D, E, and F. These low energy performances led to point deductions in the WWS, limited rents, and lower attractiveness for tenants and potential investors. With the Affordable Rent Act (July 2024), which regulates the mid-rent threshold (144-186 WWS points) and mandatory WWS point counts, the fund wanted to:

• Improve energy labels to increase WWS points and maximize rental prices.
• Implement cost-effective sustainability measures to make the portfolio more attractive for future sales or investments.
• Comply with legal requirements to avoid legal risks.
• Making homes more sustainable and comfortable to attract tenants.

The fund sought a partner that could combine strategic advice with practical implementation, with a focus on value creation and sustainability.

Our solution: Strategic sustainability and value enhancement

We conducted a comprehensive analysis of the 30 homes, using the NTA 8800 standards and WWS guidelines. Our approach included:

1. Portfolio analysis:
   • We identified poor insulation, inefficient ventilation, and outdated heating systems as the main bottlenecks.
   • The homes had an average heat requirement of 240 kWh/m²/year, which indicated energy loss.
2. Sustainability measures:
   • PV panels: Installation of 6 solar panels (440WP) per home on flat roofs to improve energy ratings.
   • Roof insulation: Insulation of roofs with PIR boards (Rc≥4.0) to minimize heat loss.
   • Decentralized heat recovery ventilation: Installation of CO2-controlled heat recovery units for efficient ventilation and comfort.
3. WWS optimization:
   • We calculated the impact of energy label improvements on WWS points and recommended minor qualitative adjustments, such as luxury kitchens, to maximize points.
   • We provided accurate WWS point counts to optimize rents within the mid-range rental limit.
4. Subsidy management:
   • We advised on ISDE and SVOH subsidies, which reduced investment costs by approximately 20%.
   • Each report included a cost-benefit analysis with ROI, increase in value, and CO2 reduction.
5. Implementation support:
   • We coordinated with contractors in The Hague to ensure efficient execution over 10 months, with minimal disruption.
   • We gathered evidence for energy label registration without additional inspections.

Results: An attractive, sustainable portfolio

Our sustainability reports yielded excellent results for the real estate fund:

• Improved energy labels: The homes went from D/E/F to A/B, with an average decrease in primary energy consumption from 340 kWh/m²/year to approximately 90 kWh/m²/year.
• Rental value increase: The higher WWS scores enabled rents within the mid-range rental limit, increasing annual rental income by approximately €60,000 for the portfolio.
• Future-proofing: The portfolio complies with the Affordable Rent Act, with WWS compliance, thereby avoiding legal risks.
• Sustainability: The measures reduced CO2 emissions by approximately 2,800 kg per home per year, a total of 84,000 kg for the portfolio.
• Living comfort and increase in value: Lower energy costs and improved comfort made the homes more attractive, while the market value of the portfolio increased by an estimated €1,200,000.

The added value of Renewable Partners

This case study shows how we support investors:

• Strategic value creation: We combined sustainability with rent optimization to make the portfolio more attractive to investors.
• WWS expertise: We maximized rental prices within legal frameworks, with accurate point counts.
• Cost-effective sustainability: We achieved a strong ROI through subsidies and cost-efficient measures.
• Complete peace of mind: From analysis to implementation, we took care of everything for the fund.

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