ESG and sustainability issues are moving centre stage in Europe, experts agreed at Real Asset Media’s Cradle to Grave Rental Solutions – Urban Being – The Future of City Living Investment Briefing, which was held in Amsterdam recently.
‘We are strong believers in impact investing,’ said Jaap van der Bijl, CEO, Altera Vastgoed. ‘Making your assets future-proof is a win/win for both investors and tenants, delivering returns to one and creating value for the other’.
In order to provide evidence to investors, a multi-layered approach is needed as well as a comprehensive set of measuring tools to check the sustainability elements in your asset or portfolio, he said.
‘We have set our goals on sustainability and we are very ambitious for a good reason,’ said van der Bijl. ‘We are delivering a dual return, financial and impact, and preparing for the future because we are spreading out our capex and also making returns more predictable for an unforeseen future, which is very attractive for investors who have long-term liabilities’.
Regulation is constantly changing and it will become more strict. ‘The Dutch government has made it clear that the owner of the real estate is responsible for its impact,’ said Hein van der Meer, Partner, CMS. It just shows that you cannot hide’.
Sustainability is crossing the line from being a choice to being a necessity, experts agreed.
‘Our customers are very knowledgeable on these topics and if we don’t meet their requirements we lose our customers,’ said Dimphy van Wijk, Head of Real Estate Benelux, The Student Hotel. ‘It is also a financing requirement, as it is difficult to get a development done if those issues are not addressed’.
In practice, non-compliance can mean not getting funding for a project or not finding tenants for a building.
‘In the end if you don’t comply you will be out of business as a developer, an investor or a landlord,’ said Gert-Wim Bos, Director, COD. ‘But I am very happy to see investors allocate extra budget for sustainability elements now, because you need an alignment of interests’.
Investors do seem to be coming on board, said Clare Thomas, Partner, CMS: ‘The majority now agree that tackling climate changed and sustainability is an urgent priority for the real estate sector, which is a shift from what we have seen historically’.
The next shift, she said, ‘is not just talking about policies and processes but having people-created strategies and positive choices to take these issues forward’.
Residential as an investment class can also learn a lot from other sectors that tackled these issues earlier. ‘The office sector is far ahead when it comes to sustainability and technology,’ said Bos. ‘We can certainly follow their lead and use some good elements in the resi sector’.
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