Investing in sustainable real estate

Our sustainable real estate strategy is built on two pillars: certified sustainable assets and the reduction of environmental impact. Sustainable real estate helps to combat climate change and generates broader social, economic, environmental and health benefits. We are convinced that our approach reduces risk, increases client returns and makes our real estate assets and portfolios more attractive.

Sustainable buildings

Sustainable building certificates enable us to show where we are in terms of sustainability at asset level and how far we still have to go. We use internationally accepted sustainability certificates to measure and assess the overall sustainability of our assets. Benchmarks help us to make informed business decisions aimed at mitigating environmental, social and governance risks and to enhance our long-term returns. Certificates such as BREEAM measure criteria that go beyond legislative requirements and provide us with instruments to encourage more responsible tenant behaviour, such as cutting waste and reducing energy consumption.

The Fund uses BREEAM to measure and assess the overall sustainability of its buildings. The BREAAM methodology covers a wide range of subjects; from energy to transport, from vegetation and materials to indoor quality. This makes it a very useful tool for the implementation of sustainability measures at various levels within the Fund.

The 2018 target for sustainability measures was to achieve a BREEAM ‘GOOD’ rating for new developments, acquisitions and major renovations in the portfolio and to achieve BREEAM label for 100% of our shopping centres. The Fund made a great deal of progress last year and achieved BREEAM labels for all the assets in the portfolio, with the exception of the newly-opened Centrumplan shopping centre in Rosmalen. We expect to get a BREEAM ‘GOOD’ label for this centre in the near future. But this is just the first step towards making the Fund’s entire portfolio truly sustainable. The BREEAM labelling procedure provides the Fund with a huge amount of information we can use to draw up action plans and targeted measures to reduce energy and water consumption and improve waste disposal. The Fund has now drawn up an asset sustainability plan for each asset aimed at improving their sustainability performance.

The figure below shows all certificates obtained per asset.

Sustainable building certificates

BREEAM scores shopping centres (% of standing lettable floor space)

The Fund redefined these targets in the Fund Plan 2019-2021 in such a way that we are now aiming for 50% certified assets with BREEAM-NL in-Use Good or better by end 2021 at management-level, while we have so far focused solely on certification at asset-level.

Reduction of environmental impact

We are committed to making environmental stewardship an integral part of our daily operations and strive to decrease both our direct and indirect environmental footprint. Energy consumption accounts for a large proportion of a building’s environmental footprint. Data measurement and consistent reporting via certification schemes help us to increase our buildings’ energy efficiency and reduce the associated costs, in cooperation with our tenants. We have adopted maintenance strategies that include modern, energy-efficient heating, cooling and lighting systems.

Energy efficiency is the most cost effective way for the Fund to reduce carbon emissions, but we also encourage the use of renewable energy sources. We buy certified green electricity and are boosting alternative energy use.

The Retail Fund's sustainability strategy is focused on reducing the environmental footprint of the shopping centres or retail assets in its portfolio. It does this by exerting a direct influence on the larger (public) areas of the buildings or complexes, and by investing in improvements that benefit existing and potential tenants. 

Testing the boundaries

One of the biggest dilemmas the Fund shares with other real estate investors on the sustainability front is deciding how to invest, how much to invest and what technologies or innovations to invest in to create the most sustainable portfolio possible, both in terms of positive environmental and social impact and in terms of sustainable long-term returns on our investments. This dilemma, which translates into a constant stream of choices and decisions, informs virtually everything we do to make the Fund and the retail portfolio more sustainable. Every decision related to investments in energy-saving, GHG emissions reduction or positive social impact has to be balanced against our primary goal, which is to generate healthy long-term returns for our shareholders and their stakeholders.

We want the Fund and our assets to be as sustainable as they can be, but how much we can invest is always limited by the potential impact on returns. On top of this is the question of how to invest, which can be about finding the best ways to reduce environmental impact and have a positive commercial or social impact both effectively and cost-efficiently. For instance, do we install solar panels on our retail assets? Is this even feasible for some assets? This in turn raises the question of whether retail tenants will be willing to co-invest in the form of slightly higher rents in exchange for lower energy bills. Another question is what is the best way to work with developers to maximise the sustainability of our new-build projects? Or with construction firms when we upgrade existing retail assets? We firmly believe that cooperation with our stakeholders will be the key to our success on this front.

Sustainability improvements

In 2018, the Fund carried out measures to increase the sustainability of its assets. The sustainable redevelopment of Molenhoek shopping centre in Rosmalen, which included adding insulation to the outer facade of concrete plates and renewing the roof area, improved the centre's energy label to A from G.

Monitoring performance

Monitoring environmental performance data (energy and water consumption, greenhouse gas emissions and waste) is an important part of managing sustainability issues. The Fund tracks and aims to improve the environmental performance of its managed real estate assets: those properties for which the Fund is responsible for purchasing and managing energy consumption. The Fund reports on energy consumption (electricity, heating and gas: the energy components) for its shopping centres, which translates to greenhouse gas emissions.

The Fund has set clear targets for the reduction of its environmental impact in the period 2018-2020:

• Renewable energy: increase percentage of renewable energy

• Energy: average annual reduction 2%

• GHG emissions: average annual reduction 2%

• Water: average annual reduction 2%

• Waste: Increase recycling percentage

Renewable energy production

In 2018, the Fund installed solar panels in the Parkweide shopping centre to reduce the energy consumption of the public area of this asset. In total, these panels generate approximately 26,000 kWh per year, which is more than the total energy consumption of the public area, including lighting and the charging of electric cars. The Fund also reached an agreement with one of its largest tenants, Ahold (the parent company of Albert Heijn supermarkets) on the installation of solar panels on the asset Molenhoek in Rosmalen. The Fund made the investment, while Ahold will pay a fixed fee per annum and benefits from the energy generated by the panels.

Energy consumption and GHG emissions

[updaten en GHG toevoegen] In 2018, the Fund managed to cut energy consumption by 1.1% (2017: 4.8%) on a like-for-like basis.

Water consumption

We take a strategic approach to water management because this enhances the efficiency, resilience and long-term value of our investments. The Fund is committed to reducing water consumption, reusing water and preventing water pollution and flooding.

Waste

The Fund aims to manage waste at its properties responsibly. We encourage our tenants to minimise and recycle waste. We provide recycling bins and encourage the reuse of plastics, metal and other materials. We are also studying the opportunities offered by circular economy developments.

Green portfolio

At year–end 2018, 94.6% of the Fund’s retail assets had a green energy label (2017: 98.8%), indicating a high level of energy efficiency for the portfolio. The number of assets with a green energy label declined slightly due in part to the addition of the new Centrum shopping centre in Rosmalen and the retail unit Heuvelstraat 24 to the portfolio, as these assets have not yet been labelled.

Distribution of energy labels in the portfolio

The Fund redefined these targets in the Fund Plan 2019-2021 in such a way that we are now aiming to receive Energy label A for at least 95% of the portfolio (energy-index <1.2). The target for energy reduction is now 5% per year to put the target in line with (international) climate goals (reduction of 95% of CO₂ in 2050 compared to 1990). We also raised the target for renewable energy generated on-site via solar panels to 1,000 kWp by the end of 2021.