How digitalization supports due diligence in the service of real estate investment

The key role of ESG criteria in the evaluation and valuation of real estate assets

The term ESG refers to the Environmental, Social and Governance criteria taken into account in the creation of a sustainable, ethical and socially responsible company. According to PlanRadar's analysis, implementing an ESG strategy is particularly beneficial in the real estate sector because it allows companies to attract investors, strengthen their commercial success and reduce their impact on the environment. Global ESG assets today represent a value of more than 23.000 billion dollars.

In a particularly tense economic context for the sector, companies that set ESG objectives obtain a better return on investment and benefit from easier access to less expensive sources of financing. Thus, 52% of people surveyed by Deloitte say they use ESG criteria as a strategy that creates added value[1].

Due diligence on ESG factors is becoming crucial for investors who want to make sustainable real estate investment decisions. Integrating ESG strategy into the technical due diligence process helps assess the overall value of the asset, reduce risks and increase opportunities for return on investment.

However, the collection of ESG data and the publication of demanding reports, given the extent of standards and regulations that regularly emerge, can sometimes represent a barrier for companies in the sector.

Digitalization to facilitate the audit of technical due diligence

PlanRadar's White Paper on ESG Strategies highlights how digital platforms can optimize reporting with ESG-related data. In particular, they facilitate data collection by precisely archiving information useful for identifying structural problems, inconsistencies and risks of an asset. A reliable document which makes it possible to assess the profitability and energy efficiency of real estate to support investors.

Furthermore, digital platforms can prove useful in enhancing the value of the existing real estate portfolio. Thus, investors with a portfolio of commercial buildings (with tenants) seek to increase property value and improve energy efficiency by rationalizing maintenance costs. According to the White Paper, the most recent software makes it possible to quickly estimate renovation costs in order to enable investors to make informed decisions with a view to regulatory compliance, for example (RE2020, tertiary decree).

For Sacha Atlani, Regional Manager France of PlanRadar: “In the current context of geopolitical, energy and resource management crisis, following an ESG strategy in the real estate sector is becoming a key investment factor, particularly in the case of transactions or valuation of existing assets. However, creating comprehensive documentation, as part of technical due diligence, in relation to ESG criteria can be tedious and time-consuming. Digital platforms such as ours help make this process much more efficient. »

Find the White Paper on this link.

[1] Private equity confidence survey Deloitte 2022/2023