An Eye-Opener: How Real Estate Developments Can Positively Impact Biodiversity

CBRE Investment Management, which manages NN Group's real estate portfolio, commissioned Rebel Group to explored how NN could increase biodiversity in its real estate development investments through a pilot project and case study—Westerpark West 2B in Amsterdam. The project consisted of four planned sustainable mid-market rental housing buildings. “NN Group focuses on sustainability in the broadest sense of the word. Biodiversity is part of that and there is increasing awareness of its importance,” said Tim Winters, Sustainability Ambassador within portfolio management at CBRE Investment Management.

With biodiversity under pressure, real estate investors and other stakeholders are increasingly compelled to consider nature in their investments. New regulations, such as the nature restoration regulation and the CSRD, increase the urgency. “There is a buzz in the market that we have to do something about this, which makes the benefits of more nature clear. Many stakeholders are intrinsically motivated but want to know what more nature yields in business terms,” said Mark Bode of Rebel and Flora & Fauna.

“The impact of a real estate development on biodiversity can be significant,” Winters notes. “You place something physical in an environment that was not originally intended for it. But if you design the space well, you can also make a positive impact.”

Together with ecological consultancy, Waardenburg, Rebel conducted field research to map the flora and fauna in the area. The ecologist looked at the native species that were here before office buildings were erected. Marije Braam, portfolio manager at CBRE Investment Management, initially did not know what to expect: “The ecologist counted the different species in the area, butut we did not know what the result would be.”

The language spoken by the ecologist and investors is very different, “Rebel, that looked at nature through a financial lens, could bridge the gap,” according to Bode.’

The insights from the ecological research quickly proved valuable, said Braam. “You don't realize what species are there. And it only takes limited adjustments to ensure they return to our small area.”

According to Winters, “we now know how to better design the gardens within and around the development to attract a diverse range of flora and fauna, particularly the target species designated by Amsterdam.”

The goal can be accomplished byy using plants native to the Netherlands, instead of importing species from far away. And a messy native garden is preferred over a typical, neatly raked piece of green. “We don't have to sweep everything perfectly but can create messy corners. In a forest, the leaves are not always neatly removed either. Nature cleans up itself, but it takes time.”

One of the measures is to leave dead wood lying around to attract insects. The advice to plant fewer, not more trees was a surprise. “With more low ground and hedges, combined with a smaller number of trees, you create layers with more diversity, according to Braam.

Landscaping is still often seen as a cost item. But the pilot shows how more biodiversity often means lower costs in practice. “Trees are quite expensive, and if you bring species from far away, it incurs transport costs. The idea that more biodiversity does not necessarily have to be more expensive than more traditional solutions was really an eye-opener for us,” said Braam.

According to Bode of Rebel, “the ecological benefits and positive effects of more biodiversity are also visible on other fronts—less mowing means more flowers and plants that capture water and reduce heat.” Rebel calculated the effects of more biodiversity on fine dust, noise, and CO2 emissions—matters that CBRE Investment Management can then report on.

A biodiverse development also requires much lower management costs. Bode citeds herb-rich and flower-rich grassland as examples of landscaping that require little maintenance. At Westerpark West 2B, the manager will not have to mow every week “We have found a service provider that takes biodiversity into account and only comes a few times a year, which also leads to beneficial financial results.”

An important lesson for both Rebel and CBRE Investment Management is that the entire real estate chain is needed to achieve more biodiversity. The earlier nature is considered in the process, the better. “You have to work with the developer to ensure from the beginning that nature inclusivity is included, which not only benefits nature but also the bottom line,” said Bode.

Braam, of CBRE Investment Management, said, “We know now that it is better not to complete all drawings first and then tidy up the outdoor space at the end. In the future, we will sit down earlier with other stakeholders such as municipalities and other real estate owners. If we have a larger area to create nature, we can have more impact, and fit nature in better.”

According to Braam, it will not be easy to bring biodiversity to the forefront. “We are often involved late in the process when plans are already in place, and we have less influence than we might want. However, we now include a discussion on nature when we start a new development. We think about biodiversity in addition to sustainability or timber construction.”

This pilot project case study showed how enhancing biodiversity can improve the living experience and reduce costs.