Targeted renovations – key competence of successful real estate management

Zürcher Kantonalbank manages over 400 properties throughout Switzerland with a wide variety of usage types and from different years of construction. We carry out numerous maintenance and repair projects accordingly. Our focus is on sustainability, in particular the reduction of CO₂ emissions.

The expertise of a dedicated team of specialists is essential

On average, we implement around 60 renovation projects every year with a total volume of CHF 70 to 100 million. Depending on the scope and procedure, it can take one to five years from the initial planning work to the completion of a renovation project. In order to successfully manage this volume, effective organisation with sufficient resources as well as structured and systematic methods and processes are necessary. We have specialised experts who exclusively deal with these kinds of renovation projects.

Property inspection down to the last detail

All renovation measures are based on our analysis of the condition and potential. Here we closely examine the condition of a property that requires renovation. Based on this, different forms of measures are analysed in terms of economic efficiency in the second step.

The condition and potential analysis fundamentally leads to one of three basic variants:

• Renovation: simple renovation to preserve value
• Conversion: simple renovation with additional measures such as improving thermal insulation, expanding balconies or adding extensions or new floors
• New construction: replacement of the building taking into account the maximum utilisation figure

The final recommendation for implementation takes into account efficiency, utilisation potential, conservation of resources and sustainability. As a rule, renovation while the property is occupied is our preferred option.

Examples

Bläuenstrasse Erlinsbach: Example of a simple renovation while occupied

The property of the Swisscanto Investment Foundation at Bläuenstrasse 8-14 in Erlinsbach is made up of four similar apartment buildings that were built between 1971 and 1979. An analysis of the property from 2018 showed that, although the buildings are in a functional condition, major repair measures are unavoidable to maintain rental attractiveness. In addition, the poor façade condition threatens to cause damage to the building structure. The subsequent potential analysis revealed that the property is overused. New buildings would therefore only be possible with a significant loss of space. This led to the realisation that the best option is an extensive renovation while the property is occupied. Apart from the complete modernisation of the interior, deliberate measures are being taken that actively contribute to reducing the CO₂ emissions. For example, an oil heating system is being converted to a geothermal heat pump with a gas condensing boiler, all windows are either being replaced or sealed and the exterior thermal insulation on the façade is being replaced. Furthermore, the measures include installing charging stations for electric vehicles as well as a photovoltaic system on the roof. The complete renovation is due to be finished in spring 2022.

Engweg Zürich: Example of a conversion with a floor extension while occupied

The Engweg 1/3 residential property of the Swisscanto Responsible IFCA real estate fund is centrally located in the city of Zurich. A condition analysis carried out in 2017 showed that the property, built in 1982, is still in good condition. In the medium term, major renovation measures would become necessary, but there is no immediate need for action. However, the potential analysis showed that it was possible to create an additional attic floor with up to six new apartments. In light of this, the decision was taken to perform the major renovation early while the building is occupied and build the floor extension at the same time. The planned renovation measures include sustainable exterior renovations with additional exterior heat insulation and the replacement of windows, the complete replacement of the bathrooms/toilets and kitchens, the modernisation of sanitary and electrical systems, new heat generation using geothermal probes and heat pumps as well as a ventilation system. The garage is to be retrofitted with charging stations for electric vehicles. In addition to the valuable contribution to reducing CO₂ emissions, considerable economic earnings potential and valuation gains will also be realised for shareholders through the modernisation and extension work. Construction work began in spring 2021 and is due to be completed in spring 2022.

Significant CO₂ savings potential

The potential of targeted renovation measures to reduce CO₂ emissions from a real estate portfolio should not be underestimated. In the renovation projects described above, for example, we expect savings in annual energy consumption from 1,186 K to 565 K kWh (-52.3%) in Bläuenstrasse and from 435 K to 145 K kWh (-66.6%) in Engweg. In view of the economic and ecological significance, we regard the consistent and professional maintenance and renovation of the real estate portfolio as the main core competence of successful real estate management.