You can apply pressure without being an activist

This week, we conclude our series on the links between real estate and iconic heritage. And for this last newsletter, we've chosen to talk to you about... sustainability. But, to keep with our theme, sustainability is evoked here through the SIR...

While everyone has this acronym in their ears, it can sometimes be a little vague. So what exactly is it?

SIR stands for Sociétés Immobilières Régionales. Without going into too much detail about the law governing these companies, a few key points are worth noting. Listed on the stock exchange, they are subject to strict provisions, notably requiring them to limit their debt to a maximum of 65% of their property 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 this, 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 full interview can be found in LOBBY magazine (see below), but here are a few extracts.

Marc Eeckhout explains: "In Belgium, we can't overlook the fact that 40% of CO2 emissions come from the real estate sector. It is imperative to reduce this rate. Globally, we can see 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 with 1990 levels 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 up to 100%, by planting trees or buying certificates.

How are investors reacting? Sustainability is an important criterion for investors and tenants of real estate 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 benefits from equipment 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 such cases, it may be time to sell them... This is the case in Brussels, where former office buildings in poor locations are being sold to become housing or schools".

Last but not least, our contact works for Puilaetco. And, as mentioned above, this private bank invests in CRSs. So, the question naturally arises... Where does Puilaetco's sustainability policy fit in, in a sector where everything that tends towards ecology usually takes a back seat? Not surprisingly, Marc Eeckhout sells the efforts of the company he represents: "Occupancy is a very important criterion in the management of a CRS. And a sustainable building helps maintain a high occupancy rate. We don't go to shareholder meetings. We're not activists, but we do put pressure on them. In every meeting with the CRS, we ask them what measures they are prepared to implement in terms of sustainability.

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

Rendezvous next Friday with a new theme. Brussels will be the center of attention. What we recommend you do with your family this weekend!