Kaj I. Deana - SCUPAD

Sustainability 

A real estate investor’s perspective 

Scupad 2011 Congress ‘Breaking Patterns – Changing Cities’ 

Salzburg, May 7th 2011 

Kaj Deana 

Manager Business Development & Portfolio Management

Matthew Kahn – ‘Climatopolis’ 

Concludes that reduction emissions failed. 

The pattern has been broken. 

Mankind will adapt to the future changing 

circumstances. The free market will help with the 

adaptation process. There will winning and losing 

cities 

A real estate investor's perspective, May 7th 2011 

1

Agenda 

• Bouwfonds REIM and sustainability 

• Portfolio 

• Measuring sustainability 

• Stakeholders – Shareholder 

– Tenants 

– Investors 

– Government 

• Policy Bouwfonds REIM 

• Examples Sustainable Property 

A real estate investor's perspective, May 7th 2011 2

Bouwfonds REIM - Sustainability 

2003: initiatives to start Sustainable Real Estate Fund with co-developer 

Triodos Bank 

2004: launch of the first listed sustainable Real Estate Fund worldwide 

2007: increasing enthousiasm for sustainable real estate 

2008: start policy on sustainability 

2009: first renovation and sustainability upgrade of a monumental 

building in The Netherlands (C-label) 

2010: measuring sustainability of our office and residential portfolio 


3

Bouwfonds REIM - Sustainability 

Invest in the future 

• Real estate should contribute to the 

quality of our society, now and in the 

future. 

• Specifically, we believe that Corporate 

Social Responsibility y( (CSR) means 

‘Invest in the future’: 

• active in sustainable real estate 

• ethical business practices 

• responsible operations 

• social commitment 

• These concepts are currently being 

incorporated into our core activities. 

• In the years to come, we will aim for a 

leading position in the field of CSR, 

which dovetails with Rabobank Group’s 

ambition to rank among the most 

sustainable organisations worldwide. 


4

Bouwfonds REIM - Portfolio 

Portfolio (€ x billion) 

8 

6,8 7 7,2 

6 

4 

37 3,7 

4,2 

5,1 

2 

0 

1,7 

1,3 

1 

0 

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 


5

Bouwfonds REIM - Portfolio 

•Private versus Institutional 

65% 

Private Funds 

Institutional Funds 

35% 

•Geography 

57% Netherlands 

USA 

18% 

Germany 

Europe 

•Sector 

14% 

11% 

37% 

2% 

4% 15% 

Residential 

Logistics 

Parkings 

Offices 

Retail 

Other 

33% 

9% 


6

Measuring sustainability in real estate investment? 


7


Problems with the methods: 

• Still under construction 

• €€€€€€ 

• Not applicable in other countries 

• Need too much information 

• Need too much time 


8

Pilot 


9

Worst scoring property on sustainability 

Amsterdam, Herengracht 206-214 

1917-1918 

National Monument 

Unesco protected 


10

Winner 

Wageningen, Nieuwe Kanaal 9 

A Naam real estate presentatie, investor's December perspective, 2009 May 7th 2011 11




Existing models are very good in measuring: 

• Energy efficiency 

• Use of materials 

• Technical appliances 

Adjustments of weight of factors and added new factors to the model: 

• Flexibility (possibilities of adding extra space etc) 

• Quality of use (airconditioning, comfort, safety environment) 

• Accessibility 

• Possibilities to change the use of the property (e.g. to residential) 

• Sustainability and attractiveness of the location 

Resulting in our so-called LOG-model 

So now we are able to measure! 


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OFFICES 

Pillar 1 - Location 

Weight 

Subject 

Question 

Accessibility by car Object is situated near the highway 5% 

Object is situated directly near the main road 5% 

Accessibility by airplane Distance to international airport 3% 

Accessibility by public transport Distance to Main/central trainstation 2% 

Distance to Trainstation 5% 

Distance to metrostation/tram 2% 

Distance to busstop / frequency 8% 

Accessibility 30% 

Facilities location Shopping facilities in the surroundings 5% 

Larger Shopping center/-concentration in area 3% 

Cultural facilities in the surroundings 5% 

Catering facilities in the surroundings 3% 

Nurseries in the neighbourhood 2% 

Recreative water in direct surroundings 2% 

Recreative green/park in direct surroundings 5% 

Facilities surroundings/location 25% 

Quality/appearance surroundings Monumental/historic properties in the direct surroundings 5% 

Variety / mix of property functions 3% 

Variation and consistent street image/appearance 4% 

Surrounding property negative amenities as a result of (heavy) industry 4% 

Property in area with negative amenities because of nuisance 4% 

Quality surroundings/location 20% 

Market characteristics Score local marketsize 5% 

Score vacancy local market 5% 

Score present/average historic vacancy 5% 

Score Market volatility 5% 

Score Market Liquidity 5% 

Quality market 25% 

Score Location 100% 

Weight location 40% 

Pillar 2 - Object (Property) 

GPR pillar 1 Energy 20% 

GPR pillar 2 Environment 20% 

GPR pillar 4 Quality of use 40% 

Lifespan property Property is a national monument 15% 

Property is a municipal/local monument 10% 

Property is nominated to become a monument 5% 

Year of construction property 10% 

Renovation year 10% 

Property has had several functions 10% 

Property has been made sustainable (minimum label C) 10% 

Score lifespan building 70% 

Weight lifespan 20% 

Score object (property) 100% 

Weight object (property) 40% 

Pillar 3 - User 

GPR pillar 3 Health 50% 

GPR pillar 5 Future value 50% 

GPR pillar 5 Future value corrections 

Score user 100% 

Weight user 20% 

Total score LOG 100% 


15

Graph: Score Sharpe indicator and sustainability 

icator 

Sharpe ind 

1,40 

1,20 

1,00 

0,80 

Overschiestraat 55- 

57 Amsterdam 

Hoofdstraat 21 

Apeldoorn 

De Molen 48 Houten 

Schedeldoekshaven 

101 Den Haag 

0,60 

0,40 

Beneluxlaan 9 Utrecht 

Wassenaarsew eg 80 

Den Haag 

0,20 

0,00 

4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 

Sustainability score 


16

Stakeholders 

• Shareholder: Rabobank 

• Tenants 

• Investors 

• Government 


17

Stakeholders: Rabobank Group 

Rabobank at a glance 

• Cooperative bank established in 1898 

• All-finance leader in domestic market 

• Predominant focus on Dutch market 

• Global food & agribusiness bank 

Ratios 

• Total assets 2009: € 608 billion 

• Net profit 2009: € 2.288 billion 

• 10 million clients, 1.7 million members 

• 48 countries 

• 60,247 employees 

Committed to triple-A ratings 

• Since 1981: AAA 

• Since 2001: AAA 

• Since 1981: Aaa 


18

Stakeholders: Rabobank Group 

Worldwide position 

• Top world’s largest & safest banks 

• Among top 20 world’s largest financial 

institutions (by Tier I capital) 

• Top 3 world’s safest banks (Global Finance 

magazine) 

Objectives 

• Stay a predominantly Dutch bank 

• Keep a strong co-operative identity 

• Further strengthen the all-finance leadership in 

the Netherlands 

• Further strengthen the global position as the 

number one food & agribusiness bank 

• Retain creditworthiness at triple-A level 

• Maintain a high level of Corporate Social 

Responsibility 


19

Stakeholders – Rabobank Group 

Rabobank agrees with us that sustainability is very important 

But we have to meet goals of return on economic capital. 

So it should not cost too much money! 


20

Stakeholders – Our tenants 


21



22


Most of them agree with us that sustainability is very important 

Most of them agree that… 

… it should not cost any money! 

New rules under IFRS are not helping 


23

Stakeholders – Our investors 


24



25


Most of them agree with us that t sustainability is very important 

t 

Most of them agree that… 



26

Stakeholders - Government 

Give the good example 

1st January 2010: Minimum C-label 

Consequences: only new buildings qualify 

Or renovated/upgraded buildings 


27

Stakeholders – Government 

Government is arguing that t sustainability is very important 

t 

But… 



28

Policy Bouwfonds REIM 

Existing funds 

Freedom of policy limited by 

• Stakeholders 

• Structure of existing funds 

If score is bad, several options: 

• Sell property 

• Stop managing the fund/property 

• Continu management until the end of the fund 

New funds 

All property must meet the minimum criteria of 

sustainability (besides return and risk) 

We are convinced of the benefits of sustainable investments. 

Several researches proved returns to be higher. 

Own research proved returns to be marginally higher, but especially 

risk to be lower. 


29

Examples 


30


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Our pattern as an investor has been broken 

Like Mr. Kahn, I believe: Evolution, no revolution 


39

K j D Kaj Deana 

k.deana@bouwfonds.nl 

Tel: +31 (0)33 750 47 43 

Thank you for your attention

Kaj I. Deana - SCUPAD

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