NETHERLANDS Trends and Developments Contributed by: Coco van Zuiden, Marijn Bodelier, Sabine Schoute and Simone Wijngaard, Greenberg Traurig, LLP
tainability demands. As of 1 January last year (2024), non-residential buildings, in principle, must have an energy label “C” if they are to be rented out. This requirement is likely to be tight - ened to energy label “A” by 2030. In this con - text, it is not surprising that property owners are incorporating the production of renewable ener - gy into their assets. This, however, entails new challenges for real estate operators and manag - ers, as they should be wary of new risks such as availability of grid capacity, energy taxes, and investment laws restricting business operations, among other things. The allocation of costs for implementation of sustainability measurements is nowadays often part of the lease negotiations, because this can result in financial optimisations on one hand and high investment costs on the other. It is generally not an option for real estate market players to avoid these developments as inves - tors are likely to add value to property sustain - ability. Some investors will also want to invest only in properties that qualify as “sustainable investment” under the EU Taxonomy Regulation. This regulation sets out what qualifies as sus - tainable and what does not. Its aim is to promote transparency and to prevent greenwashing. The thresholds that are set forth by the Taxonomy Regulation are, therefore, likely to become a key factor for investors. It is not surprising that now - adays this is a key aspect in due diligence pro - cesses relating to (the acquisition of) real estate. Furthermore, the implementation of the Corpo - rate Sustainability Reporting Directive (CSRD) has had and still has a significant impact on the real estate sector. In addition to the CSRD, cer - tain EU businesses are required to report on the environmental and social impact of their corpo - rate activities and the effect of their ESG actions.
Compliance is phased in from 2024–2029, so the first reports shall be publicly available this year. These developments unmistakably are also relevant for real estate finance in the Nether - lands. The popularity of sustainable financing options, such as green bonds and loans and sustainability-linked products, aimed at financ - ing environmentally friendly projects like energy- efficient buildings or sustainable infrastructure is significantly increasing. This trend comes with contractual incentives offered by lenders for sustainable real estate projects, such as pref - erential loan terms and lower interest rates for environmentally certified buildings, and, increas - ingly, defaults linked to not achieving agreed- upon sustainability KPIs or other sustainability- linked undertakings. With growing awareness of climate change and environmental concerns, investors and lenders are increasingly seeking opportunities to support sustainable real estate projects, leading to the emergence of innovative financing solutions tailored to promote sustain - ability in the sector. Sale-and-Leasebacks The sale-and-leaseback of real estate involves the owner of a real estate asset selling it to a third party, after which that party then imme - diately leases the asset back for a term at an agreed rent. Although this trend is not new (it started during the COVID-19 pandemic), we still see that sale- and-leasebacks are on the rise. Some compa - nies are facing difficulties with raising capital, which makes them financially fragile. To limit any negative financial impact, many companies have turned to alternative ways of raising financing, for example, by means of liquidating their real estate assets and leasing them back. In addi - tion, distressed sales and non-performing loans
754 CHAMBERS.COM
Powered by FlippingBook