Browsing by Subject "financing criteria"

The amount of wooden multi-storey buildings has increased in Finland during the past years, but the volume remains low. The use of wood in the large building types has increased, because of ecological, environmental, architectural and pleasantness factors. Wood element production enables larger spans when building with wood. Because of the climate change, decreasing the carbon dioxide from the atmosphere is important. Wood is a sustainable material due to its carbon storage capability and low-carbon emissions from the production. The aim of this research is to explore the criteria that impact financing decisions in multi-storey residential buildings. The research examines what the criteria for financing wooden multi-storey residential buildings are, how financiers assess risks and opportunities in wooden multi-storey constructions (WMC) and what is the role of the sustainability in WMC. The research was conducted by interviewing people in the field of financing and real estate investing. Interviews were held during autumn 2022 as online meetings. The interview results show that financiers especially focus on the financial criteria. This included profitability of the financing, ability of the construction company and risk analysis. Other criteria mentioned were location, sustainability factors, apartment pre-marketing and maintenance costs. Building material was not seen as a significant factor as it is decided by the construction company, and it is part of the risk analysis. According to the results, the building time is the riskiest time for the financier because of the low value of unfinished buildings. As risks, respondents find the construction company’s capability for the project and the lack of references, but also their realized lifecycle costs compared to concrete buildings. As opportunities good availability of material in Finland, development of the element building to lower the prices, ecological material, and carbon binding qualities were mentioned. Sustainability was seen as an important part of the financing decision; however, all respondents did not have it as a part of the current financial criteria. In addition to organization’s own sustainability goals, sustainability is guided from the outside as regulations. As an example, the EU taxonomy is already in use and is being implemented in the financing and building industry. Green financing was identified as one of the tools that guide sustainability and by adapting its criteria, construction companies may receive better loan conditions. As a conclusion, financiers are interested to finance wooden multi-storey buildings, but they require more long-term usage and cost experiences. As future research topics the thoughts and opinions of construction companies regarding the financing are suggested. In addition, what are the impacts of embedding the EU taxonomy into financiers’ and their customers’ actions.