The Nordics and Baltics are at the forefront when it comes to electricity generation from renewable sources. In 2021, more than two thirds (68%) of all GWh generated in the region came from hydro, wind and solar. Carbon-emitting burning of fossil fuels – coal, oil and gas – amounted to three per cent.

Compare that to the entire continent of Europe, where (in 2020) the share between fossils (38%) and renewables (35%) was roughly even. Looking at global electricity generation (also 2020), we find that 61% of the world’s roughly 27 million GWh had fossil origins. Renewables, meanwhile, delivered 26%, or close to seven million GWh.

But the scene is changing. Thirty years ago, renewables meant hydropower. Wind and solar existed, but with negligible impact on electricity production. Even in Denmark, a global wind power pioneer, only about three per cent of electric power came from wind turbines in 1993.

Looking at the coming three decades, given that coal is being phased out and nuclear technology is facing significant reinvestment needs, Newsec’s prediction for the Nordics and Baltics is that renewable sources will continue growing in share and importance. While the growth capacity for hydro is limited due to various restrictions, wind and solar are estimated to almost triple in volume.

: IEA (Electricity production by source from 

series we publish charts which we find eye-opening, and provide context and commentary.

Where our electricity comes from | Newsec Charts

In this edition of the Newsec Property Outlook, Newsec has analyzed ESG trends on the real estate market in the Nordics and Baltics. In the report, Newsec has identified a number of ESG trends on the real estate market that have not been highlighted earlier.

Newsec finds that ESG has risen to the top of the agenda for many real estate firms in the Nordics and Baltics. However, despite interest being high and investments intensifying, several areas within the field of ESG are yet to be fully explored, while others are in the process of maturing. The coming years are bound to be filled with innovation and broadening of initiatives within the subject, where synergies between digitalization and ESG will be realized.

Newsec Property Outlook - Autumn 2022

: Head of Advisory Sweden, Newsec; Multiple Chairman of the Board positions within Newsec Group


: Board member, Fastigo; Board member, ULI Charitable Trust


: MSc in Business Administration, IHM Business School; Diploma in Management, Henley Business School


Managing Director Advisory and Investment Management, and Deputy CEO 

Reducing a sizeable climate footprint, curbing soaring electricity costs, dealing with potential power shortage, and managing energy efficiency and reporting requirements to obtain various certifications. These are some of the challenges facing real estate today.

But with tailor-made plans, property owners can reduce energy use and cost while reducing their climate impact. The same plans can also serve to make them more profitable and attractive to investors, and obtain green financing.

“We recognise that sustainability done right can be a profitable venture. Our work for various clients contributes to making them more climate friendly as well as energy and cost efficient, which has a positive impact on property values,” says Christoffer Börjesson, responsible for Digital Accelerator at Newsec.

What actions for clients can reduce their emissions?

“In large renovation projects, which are sometimes a necessary evil, it is key to work with new processes and suppliers – and work in collaboration with our customers - to reduce CO

 emissions as much as we can. In our daily operations, it is about working with green energy contracts. Their CO

 footprints are smaller. Managing energy projects allows us to develop a range of solutions for efficiency and optimisation. We measure, analyse and decrease energy consumption and that reduces the environmental footprint. We also work on solutions for locally produced energy.”

We measure, analyse and decrease energy consumption and that reduces the environmental footprint

How solidly can you claim that increased energy efficiency will also reduce your customers’ energy costs?

“If customers invest in the digital infrastructure we often advise them to, which makes them able to measure and analyse, we know better what usage drives cost. Using that intel we can create programs to reduce energy and cut costs that risk ballooning. And of course, energy costs have come up quite significantly in the past two years, which gives efficient use an even bigger savings potential.”

Are there ways of getting around soaring energy prices?

“With our clients, we look at it holistically. Who pays for the energy? How can property owners create business around their own production and storage, and in some cases also become a producer of energy for their tenants? All to reduce costs and create incentives for green energy. A large part of this is working closely with users and tenants, to ensure that they are also involved and contribute to reducing energy costs.”

What do customers stand to gain from more digitalised management?

“If a property owner has a digital portfolio, i.e. digital technology and infrastructure that measures how their property performs in water usage, heating, climate, ventilation, utilisation rates and so on, it provides insights that make it possible to work with the costs or usage patterns that have the greatest impact their goals. Digital technology in a property, along with a management plan, enables more troubleshooting to be done centrally. You can be clear about your priorities, and target measures where they will have the greatest effect.

“To cite an example:sensors in waste management, so to optimise the garbage collection frequency. Measuring and data also help reduce energy consumption – keeping the heating or cooling or lights off when no one needs any of that. In a digitally connected property, you can control things remotely, which further reduces admin and transport to and from the property. And time saved, of course, is cost saved. Efficient use of space and resources, less need for transport and a reduced carbon footprint are some of the benefits and gains that can be achieved through digitalised management.”

Digitalisation can be a significant investment, at least initially. What are property owners thinking about that?

“If you look at it the other way around – working with increased reporting, insights into cost drivers, energy use, being part of the energy system and influencing the indoor climate – how can property owners do that without digital technology? Of course, digitalisation requires investments, but that doesn’t necessarily mean just high costs. More data-driven properties enable insights that aid prioritisation. Then you can address the things that have the greatest impact on costs and tenant experience, and quickly see returns on those investments.”

Digitalising to become more sustainable - a few key points

 – agree on a strategy and work from an overall company perspective.

 – install technical measurement infrastructure in the properties so that you measure correctly based on your plan and targets.

have clear planning and measurement instructions for the property, so that you know which measuring points and meters can be checked by the appropriate authorities, and also for various insights, reporting or follow-up.

 – Link technical measurement data with economic data, to create an overview of what underpins the largest costs and how these costs will develop over time.

Digital transformation: a stealthy path to sustainability in real estate?

In this edition of Newsec Property Outlook, Newsec has studied the changing dynamics of the post-pandemic workspace, particularly in the Nordic regions. Newsec delves into the promising potential of suburban office hubs, and highlights emerging investment trends, including the rise of the so called “middle yield” segment and the decline in transaction size within the Nordic and Baltic real estate markets. The report concludes with clear insights, where history could potentially offer some guidance for the future.

Newsec Property Outlook - Autumn 2023

Chief Marketing Officer

Sustainability is high on the property sector’s list of priorities, and no less pressing is cutting carbon emissions across commercial real estate. Simply put, buildings that fail to live up to certain standards risk becoming less valuable. What makes properties 

 is shifting from prime locations with sweeping views to net-zero emissions, promoting well-being and demonstrating resilience to climate change. In industry terms, the transition is often referred to as going from 

Studies cited by the World Economic Forum on the value of a 

 in real estate indicate that, today, certified buildings yield a rent premium of 6 per cent and a sales premium of almost 8 per cent.

Forward-thinking real estate owners who can make sense of this shift and carve out their own opportunities will likely have the most valuable portfolios in the future. Know-how of financing, transformation and management in a new and green economic climate, along with the ability to use data to gain deep market insights, will be crucial.

So, how brown is a building and how green does it need to become? Which initiatives should top the list and what requirements need to be met to obtain financing?

There is no doubt the field is yearning, to put it mildly, for expertise. Buildings are unique systems with different physical and technical conditions. Variables such as age, property type and construction all impact in very different ways. Accurate data is critical in reaching the correct decisions and setting priorities. Property owners need to start to map current performance by focusing (and usually enhancing) their data collection procedures. Skillful analysis of the insights derived from the data will start showing the economic implications of an investment. Knowing how to drive the change is another challenge, which involves setting priorities. There is rarely a shortage of activities to engage in, not all can feature on the change roadmap.

Considering that 80 per cent of existing properties will still be around in 2050, retrofitting is essential to meet the demand of upcoming regulations and achieving net-zero carbon emissions.

In the future, property owners that fail to fully comprehend and consider sustainability aspects, will find it hard to secure financing.

At an event co-hosted by Newsec in Almedalen, where Swedish politicians and business come together to find common ground, Katya Nolvall, Head of Sustainable Capital Markets at Swedbank, said there are currently two paths to green financing. One is green loans, which offer benefits if a building is already certified and can demonstrate top-class high energy performance. The other is sustainability-linked loans, where owners need to show that they have a defined sustainability roadmap and specified goals on a company level (some of which might include making properties greener) within a few years.

As the conversion towards a green real estate gains momentum, companies in the industry that fail to keep up, will become irrelevant. The next decade will be critical for the real estate industry – it needs to elevate its role in sustainable development to secure a zero-carbon future. Otherwise, property investors risk being left behind with declining property values.

Panel moderated by Daniela Grotenfelt, Group Sustainability Director at Newsec. Participants included Katya Nolvall, Head of Sustainable Capital Markets at Swedbank, Jenny Lindholm, CIO at Alecta Fastigheter and Christoffer Börjesson, Head of Digital Accelerator at Newsec. Photo: David Sahlberg.

Turning brown into green

Get the freshest insights on the thriving Nordic property market. Our updated report satisfies customer demands, providing essential data and key figures. Stay ahead with real-time information on real estate transactions throughout the Nordic region. Discover who's buying from whom and which countries contribute the most capital. Gain a competitive edge and make informed decisions with our comprehensive Nordic Market Report. Don't miss out on this essential resource for success in the Nordic real estate industry.

Market report – The Nordic property market May 2023

Managing Director Digital Accelerator

Plenty of property owners lack the time and resources to evaluate and pick technical solutions to keep up with digital transformation in the property industry. 

With connected buildings, property owners can achieve better customer experience and flexible spaces for their tenants while meeting more stringent regulatory requirements and new market demands.

In the real estate industry, digital transformation is becoming an increasingly important element in achieving business goals. Digitalization is also a tool to meet growing demands for sustainability and reduced climate impact, while at the same time meeting increased energy supply needs. Properties are a key component of the smart and sustainable city in everything from energy systems to logistics, deliveries, and mobility services.

Customers and businesses want smart and sustainable buildings

Tenants, banks, public authorities and the world at large are increasingly demanding connected and sustainable properties. In practice, this may include:

Smart solutions for flexible working, such as mobile access, visitor management, and check-in as well as digital booking of workspaces and meeting rooms - ideally in custom-built apps for internal use, but also external apps for tenants.

Properties and spaces that have the potential to be productive and thriving places for work, commerce, and living.

Properties that comply with energy and environmental standards set by the authorities and the wider community and meet society's climate targets.

To meet requirements, more technology needs to be incorporated into properties, for example connected systems to deliver data securely. This in turn leads to challenges that are often new to property owners, such as concerns about IT security.

When digitizing properties, owners could also pose the following questions

Is a proposed solution secure and scalable - both with respect to networks and information management?

, a strategy to gather data from different systems in the property in a central location to structure it and publish it to services and applications?

Is it possible to better predict and thereby plan operational and maintenance activities, and on top of that automate management processes?

Information from the property that provides fact-based insights. It enables property owners, together with Newsec, to better order purchases, measures, and technical solutions and to reduce costly systems or optimize space in an office.

All in all, property owners face a plethora of choices as they determine which technologies, applications and suppliers they need to address their unique challenges. Not to mention the issue of achieving efficient data exchange between those systems.

Our experience of using known technologies and tried-and-tested platforms has demonstrated (with emphasis) the importance of looking at the entire digital ecosystem, and making as few decisions as possible in isolation.

Key steps towards establishing a digital property

the “highway” to consistently connect systems and gain insights from the products and systems that are connected.

 to carry out technical measurement of energy systems (water, heating, cooling, and electricity) in the property. Sensors can also be installed for so-called insight measurement, which can include measuring how the premises are used or movement patterns.

. Integrating with existing building automation systems to extract information on operations as well as data on performance and alarms from the property.

- a digital copy and data model of the property using drawings and documents to digitally describe the property and have all information consolidated and represented in one place.

And on top of that, we recommend a method for real-time monitoring of cost drivers and energy consumers in a property, the first step towards efficiency gains.

The future of real estate is digital

Newsec acted as exclusive financial adviser to Mirova, an affiliate of Natixis Investment Management dedicated to sustainable investment via its funds Mirova Eurofideme 3 and Mirova Renewable Co-Investment 1, and to Eolus Wind (jointly the “Sellers”) on the sale of an operating wind farm portfolio in Sweden. The portfolio includes the 19.8 MW Långmarken wind farm in Kristinehamn, Southern Sweden (SE3) and the 27.6 MW Våsberget wind farm in Ljusdal, Northern Sweden (SE2).

The sale marks the Sellers’ exit from the portfolio following the pre-construction investment decision in 2015 and the first five years of operations. Both wind farms have been operational since 2017 and offer a versatile multi-option PPA offtake framework with Statkraft until 2032, allowing for short and medium-term strategic adaptability.

The portfolio is acquired by Glennmont Partners (“Glennmont”), Nuveen Infrastructure’s clean energy specialist and one of the world’s largest fund managers investing in clean energy. The investment is Glennmont’s first from their open-ended €700m brownfield European renewable infrastructure fund, which Glennmont launched with Dutch investor MN last year.

Commenting on the investment, Raphaël Lance, Head of Energy Transition Funds at Mirova said:

“We are proud to have brought in operation this Swedish portfolio with the help of initial developers and construction companies Eolus and RES Renewables Norden and with the support of our co-investor EIB. After almost six years of operations, in line with our third fund mandate, we are delighted to hand it over to the experienced teams at Nuveen.”

Commenting on the cooperation with Newsec Infra, Raphaël Lance continued:

“As in 2015, we are very satisfied by Newsec Infra’s support on this transaction. Through its deep knowledge of the Nordics environment and its considerable experience, Newsec Infra ensured a smooth and reliable sale process, which brought significant value for both the seller and the buyer.”

Omid Ashrafi, Managing Partner at Newsec commented:

“We are very thankful for the vote of confidence, being able to support this transaction. We worked with Mirova at the time of their investment decision in Våsberget in 2015 and now have the pleasure of also following this project, as part of the portfolio, all the way to exit in operating phase. Due to the rapid build-out of onshore wind in Sweden, we now have a considerable asset base forming an increasingly active secondary market. “Project Blizzard” is our third Nordic operating wind farm transaction signed in 2022. I believe that we will continue to see new inflow of capital for construction of renewable energy assets as well as into transactions with operating assets”.

Digital transformation: a stealthy path to sustainability in real estate?

Newsec Property Outlook - Autumn 2023

Where our electricity comes from | Newsec Charts

“ESG is not only the moment of truth, but an opportunity of a lifetime for the real estate market.”

Popular posts

01

Turning brown into green

02

Market report – The Nordic property market May 2023

03

The future of real estate is digital

04

Newsec advises on 47 MW operating wind portfolio in Sweden

05

Where our electricity comes from | Newsec Charts