Research Project: Risk assessment of the future effects of climate change for the real estate industry (ImmoRisk)

Project briefing

• Status Completed
• Project duration October 2015 – December 2018
• Programme ExWoSt

Real estate owners, investors and developers need more transparency regarding current and future climate related hazards and risks, especially to reduce the extent of financial and health risks of climate change. Within the GIS-ImmoRisk research project a target-group-oriented geographical information system has been developed, which enables a data-based qualitative and quantitative assessment of climate risks and location-specific hazards caused by extreme weather events.

Project duration: October 2015 – December 2018

Background

The pace of climate change will strongly accelerate throughout the 21st century. Leading climatologists, the Intergovernmental Panel on Climate Change (IPCC) as well as reinsurance companies expect a rising amount of weather-related losses within this century caused by the progressing climate change. In Germany, extreme weather events and resulting losses are expected to increase as well, but with specific regional differences.

Natural hazards like windstorm, hail or heavy rain already cause damage to buildings equal to billions of euros every year in Germany. In urban areas, there is a significant increase of heat waves, potentially resulting in a higher mortality rate especially for children, the elderly and people with poor health. Property owners, investors willing to purchase and developers – in the private, commercial as well as public sector – face a completely changed risk situation. Municipalities and real estate owners therefore need to take measures that contribute to a reduction of potential risks.

However, actors from the housing and property industry still lack reliable information enabling the identification, analysis and assessment of climate impacts and related risks. Such information could significantly improve the actors’ decision-making processes regarding the selection of location and property as well as their investment behaviour as a whole. This includes risk-reducing adaptation strategies in the existing building stock, the risk diversification in portfolio management as well as the conclusion of an insurance policy covering financial losses in the event of damage.

Objective

Against this background, the ImmoRisk tool was developed as a first step between 2011 through 2013 within the framework of the 1st "Adaptation Action Plan" of the "German Strategy for Adaptation to Climate Change". The ImmoRisk tool enables the assessment of current and future climate hazards and risks at 15 pilot sites.

In a second step, the research project GIS-ImmoRisk started in October 2015 as part of the 2nd "Adaptation Action Plan" and developed the nationwide geographical information system GIS-ImmoRisk Naturgefahren. The tool supports property owners, investors and developers in assessing location specific hazards resulting from extreme weather events like heavy rainfall, winter storms, wildfires, earthquakes or heat exposure. It is further designed to carry out qualitative and quantitative assessments of climate risks for individual properties.

The development of the GIS-ImmoRisk Naturgefahren tool expanded on previous findings from the finalised research projects ImmoKlima and ImmoRisk.

The geographical information system serves as a decision-making tool and basis for action in the context of investments and provides users with appropriate (background-)information and explanations. Users can make risk assessments for several buildings, enabling an overall view of hazards and risks within their own portfolio. Moreover, results of micro-scaled thermal simulations for the city of Cologne provide insights on the future hazard of summer heatwaves. Apart from the public sector, the commercial real estate and housing industry was considered as primary target user group.

Contractor of the project were Institut für Immobilienökonomie GmbH, Wörgl, Prof. Dr. Sven Bienert, Dr. Jens Hirsch and Manuel Illmeyer (LFRZ Land-, forst- und wasserwirtschaftliches Rechenzentrum GmbH, Wien).