What do you see as your main goals for your period as Chairman?
I would first like to thank Méka Brunel for her time as Chairwoman of EPRA and congratulate her on her many achievements, most noteworthy of which, in my opinion, is the launching of the EPRA Diversity and Inclusion (D&I) program.
We are clearly facing macro-economic headwinds, but EPRA is well capitalised, and the membership numbers have not declined thanks to the hard work of the EPRA management team.
More than the economic issues is the steady stream of legislation that we all face. Whether it is the EU Taxonomy, taxation or threats to REIT legislation, the list goes on, and EPRA’s role will be to advocate for our sector and help guide us as an industry. To this end, one of the first items we have agreed on is for EPRA to produce a comprehensive set of guidelines and share best practices around the EU Taxonomy.
EPRA will, of course, continue to run the D&I program started by Méka and focus strongly on ESG and the growth of the sector so we can continue to be ahead of the curve when it comes to the climate emergency.
Finally, on the legislation part, and as a landlord who operates across borders, I would like to see mutual recognition of REITs and work at a European level to facilitate cooperation and harmonisation as well as to protect existing REIT regimes.
You mentioned economic headwinds. As an office landlord in Spain’s main urban hubs, what are your greatest challenges?
The pandemic has clearly thrown up challenges, many of which we are all yet to fully see, though I believe that main trends, such as urbanisation, remain as strong as ever. Our assets are more than 80% located in prime CBD locations in the main Spanish and French hubs such as Barcelona, Madrid and Paris. Furthermore, with 95% Energy Certified in the highest categories, I still believe that the highest quality assets in the right locations will win. Tenants and their employees increasingly demand buildings that are efficient, green and have an emphasis on well-being, and we deliver these assets through renovation or development.
More than this, as I already mentioned, is the climate emergency and how we as a sector respond. This is not my challenge but our sector’s greatest challenge and will be a main focus of my time as EPRA Chair.
At Colonial, we are requalifying all our bonds debt to green bonds so that the capital we deploy has ESG at its heart and will certainly continue to advocate for this at the EPRA level.
There has been a lot of M&A activity in the real estate sector recently. Do you think this will impact your time as Chairman?
Indeed, we have seen a number of companies either go private or merge with their peers. This is partly cyclical and a response to the pandemic, but I think there are a number of things we can do as a sector. One of my goals, as I mentioned, is to help grow the sector.
If you look at other markets, the new economy is becoming a large part of the real estate world. Whether that is data centres, cell towers or life sciences and here, again, we have a link with the pandemic.
So growing the sector in Europe post-pandemic and encouraging EPRA to look at the new economies for the European sector will be one of my aims. The European sector has diversified very well over the last decade, away from just the traditional assets that I represent. If we think back only six or seven years, there was almost no residential exposure and a few healthcare assets. These sectors now make up 32% of the FTSE EPRA NAREIT European Index (FEN Index). So, as an industry, European listed real estate is used to change and diversification, but we need to do more and I will be encouraging Dominique and his team to pursue these growth opportunities.
I don’t want to put a figure on it, but perhaps at the end of my period as Chairman, the European sector’s share of the FEN Global Index will have grown – now there’s a challenge!