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In collaboration with the British Chamber of Commerce in Germany, Drees & Sommer organized a British-German Real Estate Expert Talk at Glasgow City Chambers on October 21, 2019. At the event, government representatives as well as experts from the finance and construction industry discussed the topic ‘Designing the Future – Sustainable House Building in the UK and Germany’.

Impressions

Fast increasing urban populations and the need to reduce their environmental impact requires a change of how we design our cities. The technology and knowledge to create high-quality, low-carbon and resilient homes exists, but current policies and standards are failing to drive the scale and pace of change needed.

During the Expert Talk the moderators Richard Ogden, Director at Stokewood Development Ltd and Harald Roy, Head of International Business Development at Drees & Sommer, Frankfurt, guided the participants through difficult questions, such as: How can the building industry fill the skills gap? Why is there not enough environmentally responsible finance available? Can modular construction techniques help? Can the housing crisis and climate crisis be solved together and what is the best way to do this?

The event ended with an evening reception by invitation of Eva Bolander, Lord Provost of the city of Glasgow.

Opening Remarks

Alexander Altmann, Chairman Scotland and Northern England of the BCCG

“Three million new homes must be built over the next 25 years to solve the United Kingdom’s housing crisis, according to a UK government report. At the same time the UK’s target is to reduce carbon emissions by 80 percent over the next 30 years.”

Barbara Quick, Consul General Scotland and Northern England, German Foreign Office, Edinburgh

“In Germany the building sector is responsible for 30 percent of total CO2 emissions. This corresponds to 120 million tonnes a year. The plan is to reduce emissions gradually by increasing funding, information and advice, as well as CO2 pricing and other regulatory measures. In the end it is essential that home owners join in.”

Markus Weigold, Partner and Managing Director at Drees & Sommer Berlin

“Could it be possible to bring the emotional and rational part together? Housing companies can build faster, cheaper and to a higher quality. Let’s create green assets, let’s create financing bottles, combining financial issues and sustainability issues. Be climate positive for the next generation!”

Kevin Stewart, Member of the Scottish Parliament (MSP) and Minister for Housing and Planning

Before his election to the Scottish Parliament, he was previously the Depute Leader of Aberdeen City Council and served as a local councillor for more than eleven years. As a councillor, he chaired the Finance and Resources Committee and the North East of Scotland's Regional Transport Partnership, NESTRANS. Kevin Stewart has served in the Scottish Parliament as the member for Aberdeen Central since 2011. He was the Convener of the Local Government and Regeneration Committee in the last Parliament and sat on the Welfare Reform and Justice Sub-Committee on Policing.

The Scottish Government’s Net Zero Carbon Emissions Target and the Impact on House Building

SUMMARY OF THE STATEMENTS:

> By 2045 we will reach net zero carbon emissions and make Scotland a truly green economy and society.

> The Scottish government is putting a lot of effort into achieving the goal of helping everyone in Scotland to live in a high-quality, energy-efficient, affordable home that meets their needs. Through our combined expertise and joint cooperation across businesses and politics, new housing can be made sustainable for the future and available for those who move or need it.

> We are beginning to see an impact, not just on our national targets, but on the financial health and wellbeing of the people who live in these homes.

Daniel Ulrich, Head of Planning and Construction, City of Nuremberg, Germany

Born in 1972, Daniel Ulrich studied architecture, urban planning and landscape planning in Kassel before obtaining his degree in structural engineering in Munich in 2001. Since 2014 he has been the Head of Planning and Construction for the City of Nuremberg, with responsibility for transport; city planning and urban development promotion; building; underground trains; building regulation, including preservation of historical monuments; and inspection bodies for structural mechanics.

SUMMARY OF THE STATEMENTS:

> There are problems around the construction of higher residential buildings – people don’t want this kind of building near them. It is also difficult and very expensive to buy land.

> The city of Nuremberg is trying to find opportunities for public development; and they are trying to acquire land – which is a complicated process. They often enter into public-private partnerships – an agreement between the city and the investor – to make sure there is a certain portion of social housing as well as a portion for commercial purposes.

> Sustainability is always a social issue as well – we try to reconcile ecological and economic aspects, especially with regards to social housing.

Stephen Good, Chief Executive, Construction Scotland Innovation Centre, Glasgow

Stephen Good drives CSIC’s vision and strategy, which is focused on helping deliver growth to businesses through their adoption of new innovative solutions. Under Stephen's leadership, CSIC’s ambition is to deliver an innovation revolution within the Scottish construction industry and help position those businesses globally as respected leaders of construction innovation.

SUMMARY OF THE STATEMENTS:

> The three keys to driving change are innovation, collaboration and bold leadership.

> Innovation is change that unlocks new value.

> Disrupt ourselves before we get disrupted?

Summary of the statements of the first debate: Housing Crisis vs Climate Crisis – Why Both can be Solved Together?

Stephen Good, Chief Executive, Construction Scotland Innovation Centre, Glasgow:The three keys to driving change are innovation, collaboration and bold leadership

Patrick Flynn, Head of Housing and Regeneration Services, Glasgow City Council

Reinhard Weiss, Director, 3s Architects, London: There needs to be more precision: the government must give incentives to encourage people to refurbish their houses; certain measures have to be introduced specifically for this end.

Marco Abdallah, Head of Engineering, Drees & Sommer UK:Why is the construction industry so slow in terms of innovation? The challenge in the real estate industry is that every project is so individual that you have to find solutions particular to each specific project, and you can’t copy it. The knowledge is created within the project and it can’t be directly applied to the next one.

Josef Schafleitner, CEO of ZmartHaus Zero Carbon Smart Solutions, London: There are four principle things necessary to reach carbon neutrality: the first is sustainable building materials and offsite manufacturing; the second is green efficient energy; the third is integrated smart home solutions; and the fourth is managing the system by smart grid technology.

Stuart Heslop, Managing Director Real Estate Finance, Scotland and North England and Head of UK Housing Finance at Royal Bank of Scotland, Edinburgh

Stuart Heslop has been with RBS for 32 years and has worked across various sectors including oil and gas structured finance, large corporate banking, financial institutions and, since 2009, real estate finance. In the last two years he has also had responsibility for our UK Housing Finance business alongside his Commercial Real Estate Finance teams in Scotland and northern England.

Allan Leal, Partner at Burness Paull LLP, Edinburgh

Allan Leal is a specialist in Scots and English law and is a partner in our Banking and Funds division, with an excellent track record in advising on real estate finance, acquisition finance and fund finance, both domestically and internationally. He has previously worked for Herbert Smith in both London and Moscow, as well as running a successful family business. He is also a key member of our German desk and works closely with German lenders and borrowers looking to fund and acquire assets in Scotland and the UK.

Sandy Morrison, Partner at HTA Design LLP, Edinburgh

Sandy Morrison joined HTA in 1998 and now runs our growing Edinburgh office. He is responsible for upholding design quality across both the Edinburgh and London offices, working with our department heads to achieve a high quality, integrated approach to urban design, architecture, sustainability and graphic design. Together with our clients, the team at HTA strives to achieve our placemaking objectives.

Summary of the statements of the second debate: Sustainable House Building vs Prudent Financing – Time for Change

Stuart Heslop, Head of UK Housing Finance at Royal Bank of Scotland, Edinburgh: Running our UK Housing business puts me at the forefront of the sustainable house building journey. We are actively looking for ways to encourage our clients to develop in a sustainable way.

Allan Leal, Partner at Burness Paull LLP, Edinburgh:A lot is happening in this area of green and sustainable house building. Although it is starting, there is some way to go yet. We are in an early stage of house building in this area, but it will quickly gather momentum.

Sandy Morrison, Partner at HTA Design LLP, Edinburgh:I want to make the point that modular manufacturing is better for us, better for investors, better for residents, better for the people who work on the site. The embodied CO2 savings we are making by using modular construction at Greenford Quay would be equivalent to 160,287 trees being planted.

Hans Grabowski, Associate Director at Andrew Black Design Ltd, Dundee:There are significant barriers preventing adoption of off-site manufacturing methods in the UK and a shift in attitude in all sectors of the construction industry and government is required to ensure increased adoption of off-site manufacturing solutions.

Thomas Graf, Head of Transaction at Drees & Sommer, Berlin:Who will pay for all this? The investor. We optimize the production of housing, office building, and greenfield development, and we have ideas for financing and for the techniques involved. However, ultimately, when the reality does not match the expectations of the investor, then nothing will happen and the tendency is then to fall back on what we had before in terms of housing.

The event was kindly supported by

Contact

To contact Drees & Sommer UK:

Harald Roy, harald.roy@dreso.com, +49 172 7698632

Phillip Ratcliffe, phillip.ratcliffe@dreso.com, +44 7971 406196

Marco Abdallah, marco.abdallah@dreso.com, +44 7867 428013

To contact organizer:

Markus Weigold, Drees & Sommer, markus.weigold@dreso.com, +49 174 9891700

Kim Weinmann, Drees & Sommer, kim.weinmann@dreso.com, +49 172 7690198

Alexander Altmann, Blick Rothenberg, alexander.altmann@dreso.com, +44 20 74860111