French Property developers go green

Major French developers all adopt LEB standards early (Low Energy Building).

LEB. For the last couple of months, it has been all the developers can think of. Behind this expression lies a new law, which will come into force in January 2013.

In practical terms, all housing will have to use less than 50 kWh (kilowatt hour) per square meter and per year. It is three times less than the current law. But it is just a national average. “The LEB law will be adjusted according to the regions. In Marseille, where the weather is nice, it will be 40 kWh; in Paris, a cloudier area, it will be possible to reach 65 kWh”, adds Benoit Arviset, development manager in Quatrinvest, a rental property investment specialist.

Bouygues, Nexity, Kaufman & Broad but also Les Nouveaux Constructeurs, Bouwfonds Marignan… Almost every big French developer has decided to anticipate the call. From the 1st of January for some or from the 1st July for others, all their developments have the BBC (French for LEB) label.

Tax benefits
The reason for such an enthusiasm is the great benefits developers can get out of it: in 2011, only BBC-labelled buildings will allow their buyer-investors to benefit from the Scellier system at its fullest, with a tax reduction of up to 25% for French investors. Without this label, tax benefits are limited to 15%. “It is quite a big deal for developers, because investors account for almost 66% of sales in France”, Paris-X University teacher Michel Mouillart adds.

Thus, the developers’ imagination is limitless when it comes to respecting the law. “Putting in condensing boilers is a good way to save energy” adds Bruno Corinti, chairman of Nexity Logement. “The building’s insulation is also very important” continues Marc Pigeon, chairman of the FPC, the French federation of developers.

Whatever the techniques used, professionals all agree on something: the shift to Low Energy Buildings increases the costs of construction by 8 to 12%, which represents an increase of 4 to 6% on capital assets costs.

In view of this situation, 2 choices can be made. Bouygues and Les Nouveaux Constructeurs both claim that their prices will not go up. The others intend to increase their prices to face this sharp rise in costs. “Because of the BBC law, our prices will increase by 3 to 5% next year” states Guy Nafilyan, CEO of Kaufman & Broad.

To find out more you can speak to one of our French new build consultants on 020 7428 4910

Source: Le Figaro

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This entry was posted on Friday, July 30th, 2010 at 10:30 am and is filed under Eco-friendly buildings . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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