Message from the CEO

Dear reader,

It is my pleasure to introduce the 11th edition of our responsible investment report. Having been part of Redevco for almost the entire time of its existence, I can say that we have always demonstrated a strong commitment to sustainability and corporate responsibility since the company was founded in 1999. Redevco is now celebrating 20 years in business this year and I am proud that we have managed to uphold our “Business in Balance” principle throughout.

Business in Balance reflects our conviction that we must carefully consider the impact of our activities on the environment as well as on the community. We strive to minimise the environmental impact of our activities and the properties we manage by reducing the carbon footprint of our operations and continuing to future-proof the assets under management.

We operate in a challenging business context. In 2018 we traded over €1 billion. We have successfully divested €558 million of assets that no longer fit our strategy. Under the current changing retail landscape, we believe that the strongest, future-proof investment locations are vibrant places where people can enjoy the right mix of living, working, shopping and leisure activities. Therefore entering the residential market is a natural step, as the residential sector is a natural adjacency to our current investment beliefs. In December 2018, we announced the establishment of a new residential real estate fund of €500 million. Initially targeting potential projects in the Netherlands and Germany, with Spain and the UK as the second-tier markets, we already sealed a first deal with the acquisition of a development opportunity in the greater Amsterdam area.

Without the support and collaborative spirit of our partners, be they investor clients or retail tenants, it will be challenging to really make an impact. This is why we are particularly proud that we established a joint venture with PGGM in April 2018. The strategy of this partnership is based on the strong belief that the most successful retail destinations in the future will be those that cater for the growing consumers’ desire to enjoy a day’s shopping rather than to be focused on buying goods. And importantly, the joint venture is committed to reducing the footprint of the portfolio to net zero carbon by 2030.

We will continue to future-proof our assets under management (AuM). We have agreed with our shareholder a target of allocating at least 50% of investment value in our overall portfolio to BREEAM certified properties with a ‘Very Good’ or better rating by 2022. At the end of 2017, 88% of all our AuM were BREEAM certified, and we have continued to work on improving the quality of our properties using BREEAM as an asset management tool. This resulted in 42 properties gaining a higher BREEAM rating certificate compared with 34 in 2016. We are not stopping there and we aim to improve another 29 assets in 2018.

To measure progress in future-proofing the portfolios we manage, we have been using the BREEAM* methodology since 2009. As per the end of 2018, 84% of the total invested volume has a valid certificate and 47 properties were upgraded to a higher BREEAM rating last year compared with 42 improvements in 2017. We are not stopping there as we aim to improve another 22 assets in 2019.

Another example of our effort to contribute to a more sustainable portfolio is the Belgian retail park  ‘The Leaf’ in Ternat that was officially opened in November 2018. It was designed and built following the Cradle to Cradle™ principle and required efforts in areas like ecology, energy, management and transport, translating into higher insulation standards, recycling of demolition materials, using energy efficient installations, the provision of safe cycling infrastructure, green roofs and outdoor terraces for shop employees. We aim to achieve a BREEAM ‘Excellent’ rating, a goal that would not be possible without the help of our tenants that all agreed to sign a green lease.

We also strive to make a positive impact in the communities where we are active through our annual volunteering day and the projects supported by the Redevco Foundation. In 2018, our employees selected and supported 69 different charitable projects across Europe. In addition, we support initiatives that focus on the sustainability of the real estate sector as a whole. These initiatives aim to increase the understanding of and accelerate the transition to a more sustainable, low carbon and circular built environment. An example is the recently launched net zero carbon programme of the UK Green Building Council that is aiming to drive the transition to a net zero carbon built environment. The Redevco Foundation is the lead partner of this programme which involves and mobilises many actors in the real estate industry.

The measures we take in our own operations led to a reduction of CO2 emissions per employee to 3,187 kg of CO2, a decrease of 13% compared to 2017. We are dedicated to reach our 2020 target of 2,700 kg of CO2 per employee, which represents a 50% reduction from the baseline established in 2009, but we realise this requires additional efforts. So in 2018 we moved two office locations that will be more sustainable. Simultaneously, we continue to look for possibilities to further reduce emissions.

Tackling climate change is a global challenge that is not easily resolved and requires a vast number of stakeholders to collaborate, from governments to international institutions, from the big corporate companies to the small and medium enterprises, and eventually the end consumers: all of us. However moderate our impact as a single company might be, I believe the sum of all our efforts counts. Therefore I hope we, Redevco and you, our stakeholders, will continue to tackle this topic together.

Andrew Vaughan,
Chief Executive Officer