Building Value: A pathway to circular construction finance
The transition to a Circular Economy requires innovative business models that stimulate optimised use of repairable products, reusable components and recycling of materials. A Community of Practice (CoP) has been established in which experts from different fields have collaborated to improve the financeability of circular construction. CoP members have engaged in a case of social housing corporation Eigen Haard. This report Building Value: A pathway to circular construction finance retraces the 'learning-by-doing' trajectory of this CoP. It provides tools to unlock the potential of circular construction business models.
Five main lessons have been drawn from this exercise:
- Circular construction depends on the development of a market for used elements, products and materials.
- Unlocking the potential of circular construction requires new valuation methods, distinguishing between land and buildings.
- Circular construction can successfully be financed when risks and future potential are balanced. This can be supported by detailed financial modelling and leveraging key strengths of circular buildings as securities.
- Social housing corporations are ideally suited to implement circular economy business models since both favour long-term inclusive value above mere financial profits.
- Collaboration and transparency support the creation of synergies between different fields of expertise (business, technical, legal, financial) to tackle the challenges of circular construction business models.