Varma, a pension insurance company, owns about 60 residential properties in various parts of Finland, with a total of approximately 4,000 rental homes. New residential properties are built every year.
At the end of year 2021, Varma began carrying out its third bundle of energy renovations covering multiple residential properties.
“Sustainability is a decisive theme in everything we do, and it is also a major part of our strategy,” says Sarianna Sipola, Portfolio Manager, Residential Real Estate at Varma.
Sustainability goals guide all Varma’s investments, whether they are in equities or real estate.
”We are committed to ensuring that 25 per cent of our investments are in climate allocations by 2025. This means that they must form a climate-friendly package of investments.”
At the end of 2021, tangible climate action continued in the pension company’s residential real estate investments when it embarked on major energy renovations in nine of the residential properties it owns. The aim is for all of the buildings to use emission-free electricity by 2025 and also emission-free heating by 2030.
These are ambitious targets, but Sarianna Sipola considers them realistic:
“We have already done a lot of work and made some visible leaps forward. On our residential investments, we started in the places with the greatest potential.”
Swift progress from the initial assessment onwards
Varma began planning major energy renovations in 2019. The first step was to assess the entire residential portfolio, reviewing every property.
The situation evolves as technologies, the environment, materials and solutions change, so a one-off assessment is not enough. That is why Varma is already beginning a new round of assessments.
In practice, the most significant part of an energy renovation is the transition to geothermal energy.
“This can make it possible for the entire property’s heat production to be free of emissions. However, there are some sites where we continue to use district heating alongside geothermal solutions,” Sipola says.
Varma is also installing equipment such as solar panels on the roofs of buildings, making use of various heat pump solutions, deploying more efficient heat recovery, switching to LED lighting, and testing and regulating the settings.
“We always take the circumstances and the property in question into account when we assess the necessary and beneficial actions to take on – every building is unique.”
Certain constraints must also be taken into consideration, such as the locality, the characteristics of the plot, the age of the building, and the standard of energy efficiency at the outset.
The ongoing and completed renovations will affect over 1,300 homes.
“I believe every major company is taking sustainability action and renovating its properties, but I do not know of any other organisation doing it on this scale – in effect, the entire residential portfolio – with dozens of properties,” Sipola states.
Regular customer satisfaction surveys indicate that tenants are also interested in sustainability issues. When an energy renovation is carried out, it has no practical effect on everyday life in the home, but the consequences can be significant.
“We know that sustainability is important to our residents. That is one reason we wanted to embark on these measures,” Sipola states.
Tenants do not incur any costs for an energy renovation, but Varma’s investments are running into the millions when adding all renovations of different properties together.
“The investments pay for themselves in lowered maintenance costs.”