You can put pressure without being an activist

This week, we close our series dedicated to the links between real estate and iconic heritage. And for this last newsletter, we have chosen to talk about... sustainability. But, to stay in our theme, sustainability is evoked here through the SIR...

While everyone has this acronym in their ears, it sometimes remains a bit unclear. So what exactly is it?

SIR stands for Sociétés Immobilières Régionales. Without going into too much detail about the law that governs these companies, we can note a few strong elements. Listed on the stock exchange, they are subject to strict provisions, obliging them in particular to limit their indebtedness to a maximum of 65% of their real estate portfolio and to pay out at least 80% of their profits in the form of dividends.

Today, sustainability has also become part of the DNA of these companies. It's right up there with the times!

To talk about it, LOBBY magazine chose Marc Eeckhout, Senior Strategist at Puilaetco, a private bank whose mandate includes investing in Belgian and European SIRs on behalf of its clients.

As every week, the complete interview is to be found in the LOBBY magazine (see below), but we propose you here some extracts.

On the evolution of mentalities regarding sustainability in the CRS, Marc Eeckhout explains: "In Belgium, we cannot neglect the fact that 40% of CO2 emissions come from the real estate sector. It is imperative to reduce this rate. Globally, we notice that there are more and more initiatives to limit CO2 emissions, in particular by following the recommendations of the Paris Climate Agreement, whose objective is to reduce greenhouse gas emissions by at least 40% by 2030, compared to the 1990 level in Europe. CRSs will adapt, step by step. They are advised to publish a sustainability report every year. Some of them are already offsetting their carbon footprint, sometimes by up to 100%, through tree planting or the purchase of certificates.

And how do investors react? The sustainability criterion is important for investors and tenants of properties provided by CRSs. The latter want to integrate green buildings to reduce their costs, but also to maintain their reputation. A green building will be more attractive to tenants who will be willing to pay a higher rent if it has features such as photovoltaic panels, or a heat pump, which reduce energy costs.

In the CRS portfolio, there are sometimes buildings whose sustainable quality cannot be improved. In this case, it may be time to sell them... This is the case in Brussels, where old office buildings, poorly located, are sold to become housing or schools.

Finally, we should not forget that our interlocutor works at Puilaetco. And, as mentioned above, this private bank invests in CRS. So, the question naturally arises... What is the place of Puilaetco's sustainability policy in a sector where usually everything that tends towards ecology takes a back seat? As expected, Marc Eeckhout sells the efforts of the company he represents: "The occupancy rate is a very important criterion in the management of a CRS. And a sustainable building makes it possible to maintain a high occupancy rate. We don't go to shareholder meetings. We are not activists, but we put pressure on them. In every meeting with the CRS, we ask them what measures they are prepared to implement with regard to sustainability.

With these encouraging words, we conclude our series on real estate and iconic heritage. Click here to access LOBBY 56!

See you next Friday with a new theme. This one will put Brussels at the center of all the attention. What we advise you to do with your family this weekend!