Climate change is fundamentally influencing the risk landscape for buildings in Germany. A comprehensive study by Wüest Partner in cooperation with CLIMADA Technologies sheds light for the first time on the future physical climate risks for a large part of the German building stock. The analysis of approximately 23 million properties makes it clear that significant changes in risk assessments are to be expected by the middle of the century. The results emphasise the necessity of individual risk analyses, which will become increasingly important for well-founded investment, valuation and location decisions.
The study examines the development of various climate phenomena such as heat, heavy rainfall, river and coastal flooding, storms, and landslides, and models their effects up to 2050, taking into account different emission scenarios. Dr. Michael Heigl, Director at Wüest Partner, highlights that climate risks are developing into a crucial location and value factor. For stakeholders who invest in real estate or manage portfolios, considering a location's future climate resilience is becoming increasingly relevant.
Dominance of Heat Stress and Heavy Rainfall
The risk of heat stress is expected to increase significantly according to the study. While in the past only a few buildings were exposed to high or very high heat stress, by 2050, up to two-thirds of the entire building stock could be affected, depending on the emissions scenario. Particularly vulnerable are the southern and central regions of Germany, as well as urban areas with high population density. With increasing emissions, these risks are also expected to spread to more northern areas.
Heavy rainfall is also establishing itself as one of the greatest climate risks for real estate. The ability of warmer air to store more moisture leads to more intense precipitation events. The proportion of endangered buildings could rise from currently around 0.4 per cent to over 10 per cent by 2050. The highest risk remains in southern Germany and the low mountain ranges but is expanding northwards and westwards. In contrast, the risk of classic river flooding could decrease in some regions, while local flooding due to heavy rainfall events and surface runoff increases.
Regional dynamics are also apparent for other climate risks. The coastal flood risk is increasing, particularly along the North Sea coast and partly along the Baltic Sea. The storm risk remains primarily present in the north and west of Germany, but its further development is subject to uncertainties. The landslide risk, which mainly affects low mountain ranges and alpine fringe areas, could double or triple by 2050 depending on the emissions scenario, but overall remains at a low level.
Implications for the Real Estate Industry
The study results clarify that climate risks must be given even greater consideration in decisions regarding investments, valuations, financing, and ESG criteria. The necessity of site-specific analyses is underscored by the regional heterogeneity of risk profiles. Dr. Michael Heigl reaffirms that the analysis has created a Germany-wide data basis to objectively assess physical climate risks and enable well-founded decisions for existing properties, portfolios, and development projects. Early analysis and adaptation can contribute to the resilience and preservation of value of the real estate stock.
