Tertiary obsolescence diagnostic: securing the value of your assets before 2030
1 billion m² under constraint: is your asset on the right side?
A Greater Paris tertiary asset built before 2005 loses on average 25% of its appraisal value over 5 years if it misses the -40% regulatory trajectory by 2030. This dynamic, which we have been observing on the assets we audit over several years, is set against the energy consumption reduction obligations applicable to the tertiary stock since 2019. For an asset manager, this is no longer a theoretical risk: it is a line that gets written into the next appraisal. Kytom audits, scores and arbitrates your tertiary assets before this discount lands on the balance sheet. In 6 to 8 weeks we deliver a 40 to 60 page report that holds up in an investment committee, on assets whose average floor area is around 850 m² according to our recent portfolio. Our method, refined since 2006, cross-references four dimensions: technical obsolescence, regulatory compliance in the sense of tertiary energy obligations and the EED directive, usage appeal and energy performance. Each asset comes out with a quantified score across 6 axes and three arbitration scenarios: status quo, repositioning, restructuring or disposal. Here is how we proceed and what you gain from it.
The framework
The French tertiary stock weighs around 1 billion m², of which 75% was built before 2000. A quantified energy consumption reduction trajectory now applies to tertiary buildings, calculated relative to a reference year after 2010.
| Deadline | Required energy consumption reduction |
|---|---|
| 2030 | -40% |
| 2040 | -50% |
| 2050 | -60% |
Assets off-trajectory become stranded assets: unsellable, under-let, discounted at appraisal. Older off-trajectory assets show structurally higher vacancy rates than new or renovated buildings, a gap documented by Greater Paris market observatories.
Three challenges structure the demand from the asset managers we support:
- Financial: securing appraisal value and exit liquidity over a core+ horizon of 5 to 7 years.
- Regulatory: anticipating tertiary energy reduction obligations, BACS (decree of 20 July 2020), regulatory energy audit and the European green taxonomy.
- Leasing: capturing tenants who make signing a 6/9 year lease conditional on a recognised environmental operating certification.
Your gains
From obsolescence score to portfolio decision
A score is only valuable once translated into a defensible decision. Three readings structure the arbitration we deliver to you.
- Cash flow and avoided rent: an asset scored below 60/100 on the Image axis exposes the owner to several additional months of vacancy at lease turnover, with significant lost rental income in a tight Greater Paris zone. You quantify this risk before it materialises in the income statement.
- Green taxonomy eligible CAPEX: our grid distinguishes CAPEX eligible for the European taxonomy (envelope renovation, BACS, BMS) from recurring OPEX. On our recent assignments, a majority share of the recommended CAPEX is eligible for green financing, which lowers the weighted average cost of capital by 50 to 80 basis points depending on post-delivery banking conditions.
- Asset value and exit liquidity: a consolidated score above 75/100 secures the maintenance of appraisal value over the 5-7 year horizon of a core+ fund. Below that, the disposal-within-24-months scenario statistically takes precedence over heavy renovation in the arbitrations we deliver.
Each report includes a 2 page summary sheet, structured by score axis and by quantified scenario, directly presentable in committee.
Reading grid
Scoring across 6 axes: what we measure, how we measure it
The consolidated score aggregates six axes weighted according to the asset’s profile and the market zone. Each axis can be read on its own to identify priority arbitration levers.
| Scoring axis | Indicators measured | Reference framework |
|---|---|---|
| Energy | Consumption kWh/m²/year, tertiary reduction trajectory | Tertiary regulation and energy efficiency |
| Structure | Grid, load transfer, ceiling height | DTU, technical standards |
| Services | HVAC, lifts, BMS, BACS | Decree of 20 July 2020 |
| Image | Facade, lobby, signage, visual appeal | Kytom observation, Greater Paris market |
| Compliance | Accessibility, fire safety, ICPE | RGAA, CNPP Q18 Q19 |
| Flexibility | Partitioning, workstation density, modularity | NF S 31-080:2006 |
Two operational thresholds guide the decision. An asset that drops below 60/100 on at least two axes enters the stranded risk zone, the threshold from which a significant appraisal discount becomes likely. Above 80/100 weighted average, the asset stays competitive for 7 to 10 years without heavy CAPEX. Between the two, targeted repositioning becomes the dominant option, generally more profitable than full restructuring.
Commercial honesty
When the full diagnostic is not the right answer
Three cases where we steer you towards a lighter assignment, because the 4-phase diagnostic does not pay back its cost.
First case: assets under 500 m² of usable floor area. The fixed audit cost does not amortise on areas below 500 m² of usable floor area. We then recommend an 8 to 12 page market positioning note, delivered in 2 weeks.
Second case: the disposal decision has already been approved in the investment committee. There is no point scoring 6 axes to support a closed arbitration. A 10 page valuation note and a marketing file are enough.
Third case: the asset is post-2015, compliant with RT2012 and already covered by a recognised environmental operating certification. The informational value of the full diagnostic becomes marginal. We narrow down to two axes (flexibility and services), delivered in 3 weeks, at one third the cost.
In all other cases, the 4-phase diagnostic remains the most defensible instrument before an investment committee, because it is the only one that simultaneously quantifies regulatory risk, leasing risk and exit value.
Method
- Document collection
We review on average 120 documents per asset: EPC, regulatory energy audit, current leases, property taxes, 10-year CAPEX history, technical inspection reports. This phase takes 1 to 2 weeks depending on the completeness of the owner’s archives and determines the precision of the final scoring. - 180-point field audit
Three Kytom experts (architect, building services engineer, usage specialist) work on site for 1 to 2 days depending on the floor area. The 180-point time-stamped grid covers the envelope, HVAC, electrical systems, fire safety (Q18 Q19), accessibility and the acoustics of work spaces, with a reference threshold set at 45 dB(A) for open-plan offices. - 6-axis scoring
Each asset receives a score from 0 to 100 across six axes (energy, structure, services, image, compliance, flexibility), weighted by the market data for the zone. The operational thresholds (60/100 and 80/100) automatically flag the stranded risk zones and the priority arbitration levers. - Quantified arbitration plan
We deliver three documented scenarios (status quo, partial repositioning, heavy restructuring or disposal) with EUR/m² ratios, IRR, operating impact and the share of CAPEX eligible for the green taxonomy. The final 40 to 60 page report is delivered in 6 to 8 weeks, accompanied by a 2 page summary sheet that holds up in the investment committee.
Frequently asked questions
What is the timeframe for an obsolescence diagnostic on a Greater Paris tertiary asset?
KYTOM allows 6 to 8 weeks between document collection and delivery of the final report, within an average project timeframe of 12 weeks including investment-committee arbitration. The on-site audit mobilises 3 experts (architect, building services, usage) over 1 to 2 days depending on floor area. The deliverable, a 40- to 60-page report, is designed to remain enforceable before decision-making bodies.
