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Knowledge category: Papers and reports

Building value: A pathway to circular construction finance

Updated on 09.12.2022

This report demonstrates the radical potential to accelerate the circular economy in the built environment. The industry is re-thinking how to calculate value in buildings and how to finance them. A Community of Practice was established to formulate key reforms to current methods of valuation and financing to stimulate circular construction.

Author: Circle Economy
Year of publication: 2019

More information

The report retraces the 'learning-by-doing' trajectory in moving towards a circular economy and proposes five key learnings for circular construction, as follows:

  1. Circular construction depends on the development of a market for used elements, products and materials.
  2. Unlocking the potential of circular construction requires new valuation methods, distinguishing between land and buildings and conceiving the building as six individual layers each with their own lifespan.
  3. Circular construction can be financed successfully when risks and future potential are balanced. This can be supported by detailed financial modelling and leveraging key strengths of circular buildings as security.
  4. Social housing corporations are ideally suited to implementing circular economy business models, since both favour long-term inclusive value above mere financial profits.
  5. Collaboration and transparency support the creation of synergies between different fields of expertise (business, technical, legal, financial), needed to tackle the challenges of circular construction business models.

The case is based on Eigen Haard, a Dutch housing corporation that primarily develops and rents out social housing. Eigen Haard is responsible for developing and operating social housing projects and aims to integrate a circular approach. Eigen Haard will re-develop Fridtjof Nansenhof – a residential building complex that will be taken down and rebuilt in a circular way.

Relevance for Circular Systemic Solutions

The report provides tools to unlock the potential of circular construction business models. It focuses on circular construction, technology-driven change and the financing of circular buildings. The report is relevant for cities and regions that are developing a Circular Systemic Solution that involves the construction sector and are looking for best practices or examples of circular building financing.




Construction and buildings

built environment, CEAP2 key product value chain