Investment manager a.s.r’s residential and science park funds are having a measurable positive impact on their sectors. Elise van Herwaarden reports.
Over the course of its 125-year history a.s.r. real estate has committed to creating long-term value from both a financial and a social perspective, by investing in high-quality real estate in a responsible manner. As a result, its sectoral real estate funds have, since their launch, been committed to limiting their negative impact on the environment. Recently, this commitment has been extended to not only reducing their environmental footprint, but to also impact society positively.
So far, the ASR Dutch Core Residential Fund (ASR DCRF) and the ASR Dutch Science Park Fund (ASR DSPF) have, as part of their yearly strategy cycles, critically assessed their ability to make a societal impact. As a result, both funds have expanded their fund strategies with clearly defined and accredited impact investment strategies.
The funds’ impact investment strategies and goals align with the INREV and Global Impact Investing Network (GIIN) standards for impact investing, adding up to: “[real estate] investments made with the intention to generate positive social and environmental impact alongside a financial return”.
According to this definition, impact investments should encompass the following key elements:
- Intentionality: The intention to have a positive social or environmental impact through investments;
- Measurability: The commitment to measure and report the social and environmental performance and progress of underlying investments, ensuring transparency and accountability;
- Additionality: A positive impact which would not have occurred without the investment.
‘Generating measurable results through strong and meaningful partnerships, is key in actually realising real-world social impact.’
Elise van Herwaarden, a.s.r. real estate
ASR Dutch Core Residential Fund – affordable housing
The Dutch residential rental market is experiencing a shortage of and pressure on affordability: a result of lagging production compounded by population growth and a rise in the number of households. These factors have increased the pressure on affordable housing, one of the most basic human needs. Since ASR DCRF is able and willing to respond to this social challenge, it has developed an impact investment strategy that focuses on the addition of affordable dwellings to its portfolio.
- The fund defines the affordable rental range in the Netherlands as follows:
- Lower limit: €737 (based on the liberalised rental threshold);
- Upper limit: €1,250 (based on a modal income as defined by Statistics Netherlands, the average household size and our allocation criteria).
To make a measurable impact, the fund monitors the addition of assets under management within the affordable range, as defined above. It also has a clear focus on affordability in its standing portfolio.
To keep affordable dwellings in the standing portfolio affordable in future, the fund:
- Implements moderated (yearly) rental increases;
- Caps rents in line with the current market rents;
- Actively lowers living costs by implementing energy-saving measures (PV panels, LED lights and the maintenance programme).
ASR Dutch Science Park Fund – science park ecosystems
Science parks in the Netherlands have rapidly evolved beyond their primarily academic origins to become engines of the Dutch knowledge economy, fuelled by strong commercial growth. These are knowledge hubs where companies, universities and research institutes form unique and collaborative R&D ecosystems and where fundamental research is applied to innovative real-world scenarios.
The conditions that enable science park ecosystems to flourish require both private and public investments, as the Dutch law ‘Wet Markt en Overheid’ (the Dutch Public Enterprises Market Activities Act) inhibits universities from investing in real estate for commercial purposes, while market participants such as real estate developers or investors, often lack the long-term commitment needed to positively influence science parks. The diversity of functions required for a science park to thrive is therefore unable to develop.
ASR Dutch Science Park Fund is dedicated to making a positive and measurable impact on the quality of science park ecosystems in the Netherlands by investing in real estate for the broad range of functions which are needed for science park ecosystems to realise their full potential. ASR DSPF aims to invest at least 50% of its portfolio in real estate that makes a clearly defined impact on its local ecosystem.
In addition to making targeted individual investments, the fund also invests through partnerships with public and semi-public entities, most notably universities and local governments. These partnerships create the low-risk environment which allows the fund to invest in a broader range of real estate and work towards the further development of science parks in which the fund and its partners have a shared interest.
By providing an ideal setting for companies that work on a wide range of innovative and sustainable products and solutions, the fund is making a valuable contribution towards an equally diverse range of real world problems. With this in mind, the fund not only reports on its direct positive impact on science park ecosystems, but also on the impact its tenants make in terms of the UN Sustainable Development Goals.
ASR DSPF does this using the UN PRI Impact Investing Market Map, which provides investors with a practical link between the broad ambitions of the SDGs and real-world impact investment opportunities.
Elise van Herwaarden is sustainability manager at a.s.r. real estate