EXPO Real: Long horizons needed for impact investing

Investors with a long-term vision will devote more capital to impact investing strategies, delegates heard at Real Asset Media’s Social Impact: the living sector and affordable housing briefing, which was held at the International Investors Lounge at EXPO REAL yesterday.

“The imbalance between demand and supply is here to stay and it’s putting pressure on affordability”, said Hilke Nijmeijer, Portfolio Manager, CBRE European Residential Impact Fund, CBRE Investment Management. “People are being pushed out of cities because of rising costs, and it is our responsibility to deal with this. You need a long-term investment horizon in order to do social impact”.

Hilke Nijmeijer.

When it comes to affordable housing regulations and definitions vary in different countries but the underlying situation is similar across Europe, and is being made worse by the economic slowdown and the energy crisis.

“We focus on affordable housing but higher interest rates make it very challenging”, said Tim Holden, MD, Head of Residential UK, Edmond de Rothschild REIM. “But the one thing that won’t go away is demand being so high, so hopefully investors will take a longer term view and come on board”.

There are some encouraging signs that investors are more interested in impact investing.

“We are seeing more demand from investors who want to do social impact investing”, said Robbert van Dijk, Managing Director Residential, ASR Real Estate. “We want to add more affordable projects to our portfolio in the Netherlands, apartments that can be rented out between E600-1,000 a month to policemen, nurses and other key workers”.

The crisis is shining a new spotlight on the desperate need for affordable housing, which will lead more investors to look at this asset class.

However, it is important to look beyond virtue-signalling to focus on the substance, the real impact.

“We have seen greenwashing on the E of ESG but we are also seeing social washing on the S”, said Ron van Bloois, Founder & CEO, Multiple Impact. “You need to measure and prove that you are improving people’s lives, not just say that you do”.

[Images: Sabine M Mairiedl, Munich]