While much of the current focus of ESG regulation and investment activity is on larger, institutionally owned assets, it is landlords at the smaller end of the scale that own most of the stock which needs improvement.
So says Christophe Murciani, Head of CRE Debt Funds, Sienna Private Credit. “Regulation is definitely necessary to impose the expense of improving buildings and meeting certain guidelines, but at some point it falls short of addressing the needs of the smaller-end landlords,” he says.
“Our role is addressing those borrowers,” he added.
Last year, Sienna launched an impact lending program targeted at incentivising borrowers to use capex in four areas including energy use, total consumption, waste management and water management. When borrowers employ capex to improve ESG, Sienna reduces the interest rate on their finance facility.
“We feel that it is really where we can help address the needs of the smaller end of the landlord community which has impact, not necessarily on the best-in-class assets but in the best improvement possible.”
Click on the video to watch the full interview or listen to the podcast below.