Real estate from esg to impact investment

adminonFebruary 3, 2023February 19, 2023Leave a Comment

Impact investing as a central aspect of the "real estate" asset class. The picture shows Alexanderplatz in Berlin

For Immobilien Europa Direkt (IED), sustainability is at the heart of its investment strategy. That is why the fund has been participating in the "Global Real Estate Sustainability Benchmark (GRESB)" since 2017 and has now achieved a "4-star" rating.

For Immobilien Europa Direkt (IED), Zurich Invest AG and Schroders say it's not just about such a GRESB rating, but that sustainability is a deeply held core value. For in today's world of social change and climate crises, ecological burdens would have to be reduced as well as positive influences promoted. "This affects not only our social future, but also our investment horizons. Targeted impact investing therefore goes beyond ESG factors and proactively aims to benefit society and protect the environment while achieving attractive returns."

More and more investors want investment options that focus on sustainability and are interested in a wide range of social and environmental issues so that their investment decisions also contribute to a more sustainable society. Impact investing allows investors to engage according to their values and thus achieve a positive impact on the environment and society – in line with the investment goals they have set themselves, say the promoters.

Impact investing refers to investments that both generate attractive returns and make a positive social and environmental contribution. Therefore, it is important to understand and specifically develop the social purpose and environmental significance of an investment. This results in stable returns over the long term.

"That is why impact investing must also be a central aspect of the real estate asset class", Zurich Invest AG and Schroders emphasize.

United Nations Sustainable Development Goals

In 2015, the member states of the United Nations adopted Sustainable Development Goals (SDGs) as part of the 2030 Agenda for Sustainable Development. These sustainability goals provide a guide for public and private organizations to rank the impact of their activities and report on their results. With this in mind, it is important to choose one's sustainability goals so that they are consistent with an organization's activities and purpose. This ensures that positive impacts are achieved that are visible to all stakeholders.

Sustainability goals in IED fund management

At Schroders, three were selected from the total of 20 United Nations Sustainable Development Goals (SDGs) to provide a framework for the impact pillars in the real estate sector. They are:

Decent work and economic growth,
Sustainable cities and communities,
Measures for climate protection.

Impact investing can be used to create an impact in all segments of the real estate market. An asset manager must recognize their contributions in each asset and be able to reduce negative impacts and increase positive impacts accordingly. An appropriate approach must also take into account the needs of occupants, analyze the supply chain, and include the use of natural resources and materials, as well as aspects of waste management. Those who do this consistently will make better management decisions and improve returns in the long run, he said.

In the past, many investors believed that social and environmental benefits could only be achieved at the expense of financial returns. Schroders believes returns at market levels are also achievable with impact investing. In addition, Schroders is even convinced that environmental, social goals lead to higher investment performance overall because they already take future challenges into account. "We also apply this approach in the management of the Immobilien Europa Direkt fund, which has already led to excellent results. Impact investment pays off at all levels", according to Schroders.

The State Parents' Committee welcomes the 10-point plan of the districts for school construction and hopes that it will be implemented quickly in the districts and that the Senate Department of Finance will provide the planned structures with the financial support they envisage. We share the view that new school construction and renovation will require more staff than is currently available. Policy makers should consider whether hiring construction professionals, as with teachers at higher experience levels, can reduce the problem of attracting skilled workers in competition with the private sector, and how to outsource necessary design services.

In recent days, u. a. on the part of the Berlin FDP and the association "Gemeingut in BurgerInnenhand" (common property in the hands of citizens), new ideas, protests and concerns have been sporadically carried in the media. Based on this, questions have arisen for the National Parents' Committee regarding the topic of financing.

Critically Norman Heise, chairman of the national parents committee sees the sentence from the senate resolution of 27.06.2017, which reads as follows: "In particular, the long-term leases on the school buildings with the State of Berlin in conjunction with heritable building rights serve as loan collateral vis-A-vis the banks. The state of Berlin would grant the housing association appropriate heritable building rights."
This sentence does not explicitly name school properties, but nevertheless: "It is important to us to clarify how it can be prevented that hereditary building rights are sold or encumbered with mortgages, land or annuity debts, which are then tradable financial products. Before that, however, there are the questions of whether borrowing is necessary at all and, if so, whether it will (have to) become loans that could end up being more expensive, as economist Heinz-Josef Bontrup of the Westphalian University of Applied Sciences in Gelsenkirchen, Bocholt, Recklinghausen put it in the Berliner Zeitung of 04.11.2017 to consider. We will ask those responsible about this." says Norman Heise.

"It is also important to us that public information about the risks and opportunities of a possible borrowing by a housing association is provided and discussed. Transparency and care must be guaranteed with this topic on the part of the senate!" adds Sabina Spindeldreier, deputy. Chair.

"Students, teachers and parents in all Berlin districts have been waiting for many years for a reliable remediation roadmap that has been announced to us as LEA by the Senate Administration for the end of fall. The districts had been asked to submit a proposal by no later than 30.09.2017 to submit their priority lists to the relevant Senate administration. We assume that with the publication of the list by the districts and by the senate administration comprehensible and transparent reasons will be given why it is important that school X is now at number 1 on the list and why school Y, which has the same or similar needs and structural problems, only appears at number 5."Sabina Spindeldreier, Vice Chairwoman of the Board of Management, said. Chair to consider.

"In the districts, the district councils, students, teachers and parents will deal with these lists in their committees. The end result should be one that has a commitment for the next ten years. Care must also be taken to ensure that, in the event of damage z. B. by storms, broken water pipes and other disasters, quick solutions are possible without putting the renovation timetable in jeopardy.", demands Detlef long one, stellv. Chairman.

"With regard to rent payments, we are concerned with the question of which parameters are used to determine the rent that the districts have to pay to HOWOGE. Currently, each district receives X amount per student via cost performance accounting (CRA) for providing a school seat. Should this allocation system also apply to the new buildings, which will then belong to HOWOGE?? It would make sense if a new allocation system could finally be agreed upon overall for new buildings, as well as for existing schools, which would then not include any negative effects if a school is not fully occupied for a short period of time. Conversely, there should be no profit to be made if the school is operating beyond its spatial capacity (as is already common in many existing schools)."suggests Cornelia Partmann, deputy chairman of the state parents' committee. Chairman before.

For the state parents' committee, it is important that the process continues to move forward and does not stall or come to a standstill. Questions about the process must be asked and answered transparently. Emerging problems need to be solved. It is also important to us that statements made regarding the publication of the priority lists are honored and that the establishment of the State Advisory Council on School Construction, announced for immediately after the fall vacations, finally takes place in order to reduce the islands of information that have formed among the individual committees and institutions involved.

We have compiled our knowledge of the process in a collection of facts, which we intend to keep up to date, at http://leaberlin.en/267-current/3825-fact-collection-on-the-topic-of-school-building-published.

Last but not least:

As the state parents' committee, we stand closely alongside all school administrators who speak publicly about the conditions at their schools, regardless of possible consequences. School leaders who also publicly advocate for their schools are true leaders who accept their full responsibility to the school community. This attitude deserves the appreciation of all of us! Democracy thrives on freedom of expression, openness and transparency. This is what school should model for our children. And that's what dedicated school leaders do every day. From our point of view, it is therefore important to also use the media to lead the debate about the dilapidated state of many schools. In our view, responsible school board action includes public relations on unpopular issues, and we sincerely hope that Berlin school boards will continue to do so in the future when they deem it necessary.

When people think of mortgages, they usually think of the bank. But it is not only banks that offer mortgages – many customers are unaware that insurance companies in particular offer mortgages at very favorable conditions.

Niche role of insurance companies in the Swiss mortgage market

The domestic mortgage market is dominated by the banks. The two big banks UBS and Credit Suisse and the group of cantonal banks have the largest market shares (about two-thirds). At the same time, it is becoming increasingly apparent that, for reasons of diversification, the cantonal banks in particular are more and more interested in providing larger financing outside their own catchment area. Raiffeisen banks have made strong gains in recent years, currently (2013) holding around 16% of mortgage receivables. The remaining 20% is shared by regional banks and savings banks, which generally operate only locally, and the other banks (including Migrosbank, Bank Coop and Postfinance). Since mortgage lending is not part of the core business of insurance companies, they play only a minor role in the Swiss mortgage market as a whole.

Interesting conditions for owner-occupied homes and MFHs

Often mortgage customers are not aware that insurance companies also offer mortgages. While insurance companies generally focus on so-called "standard financing" (i.e.h. Carrying capacity up to max. 33%, loan-to-value up to max. 80%, no construction financing, no luxury properties) – but especially for owner-occupied residential property or for multi-family houses, the mortgage interest rates offered are extremely attractive – so that the banks can often only keep up with difficulty.

Attractive offers for term mortgages

Term mortgages (also called forward mortgages) with lead times of up to 12 months are also particularly interesting, where the insurance companies sometimes even waive the term surcharge. The term surcharge is added to the "normal" interest rate and paid additionally over the entire term. With certain insurance companies, customers can extend their mortgage, which is not due to expire for another 12 months, today and secure the current (still historically favorable in 2013) interest rate conditions at no extra cost.

Uncomplicated change of provider to insurance

The bank usually grants favorable mortgages only on condition that the customer has other assets such as z.B. Salary account, savings account, pension account, securities account, etc. which means additional expense for the customer. It is easier to change insurers, because usually only the mortgage is opened. To pay the mortgage interest, the customer receives a deposit slip each time. In most cases, the customer does not have to transfer his accounts to the new lender, nor is he obliged to take out an insurance policy there.

More favorable interest rates thanks to more favorable refinancing

While the larger banks in particular raise capital on the financial market, insurance companies can easily obtain cheap capital thanks to the premiums paid by policyholders. This premium money is passed on to customers in the form of favorable mortgages and is currently a far more interesting investment opportunity for the insurance company than stocks and bonds. Which credit transactions the insurance companies are allowed to make and which not, is precisely regulated in the guidelines of FINMA.

Search immediately in our mortgage calculator for cheap mortgage from banks and insurance companies or contact us without obligation on the number 044 500 71 61 – our mortgage experts will be happy to advise you!

United Nations Sustainable Development Goals

Sustainability goals in IED fund management

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