Andrew Vaughan CEO
Leading the transformation of cities
2022 was the year in which we reaffirmed our purpose with our new mission statement: ‘to lead the transformation of cities to ensure they are sustainable and liveable'.
2022 was unpredictable and volatile due to geopolitical and macroeconomic events which fuelled inflation, sparked rising interest rates and led to a fundamental repricing in the real estate market. We expect macro-economic conditions to remain tough for some time to come. But we face an even greater challenge to preserve our environment and avoid more of the catastrophic climate change events that struck globally in the past year. Despite the challenging market conditions, we still managed to grow our business significantly. This growth fuels our ability to create positive impact. A real lever was the acquisition of the majority stake in redos, a German retail warehouse specialist boosting our total assets under management to almost €10 billion.
We are committed in our ambition to make our assets under management operationally net zero carbon by 2040 and reducing the carbon footprint of our operations. As an interim milestone towards this goal, we are in the process of having an emissions reduction target for 2030 validated by the Science-Based Targets Initiative (SBTi).
In this context Project Solar made great progress last year reaching the stated target of 11,5 MWp generation capacity. 70 individual PV installations on the roofs of numerous retail parks in the Belgian portfolio are now fully operational. In the coming years Redevco aims to install solar panels on all available roofs of the retail parks it manages in Belgium. 200.000 square meters of suitable (roof) area for 32 MWp (megawatt peak) of PV installations producing green power for local tenants. This corresponds to the annual electricity consumption of 7.770 households* and an annual saving of 4.582 tons of CO2.
*Based on an average annual consumption of 3,500 kWh per household.
Transforming existing stock into new, mostly mixed-use, properties
The coming years we will direct a lot of our energy towards the regeneration of urban areas and repurposing existing, mostly retail assets to ensure the properties will be sustainable and create social value for future generations. In practice this will mean turning large mono-functional assets into locations where people can live, work and play under one roof.
In line with our new mission statement, we have started some amazing redevelopment projects. To name one, repurposing the former C&A store in Hamburg adding two hotels next to retail and food & beverage. Another important showcase will be the project in Groningen where we will add 45 apartments constructed mostly in timber. We also completed the works in RICH’L, the retail park in Waterloo Belgium with a very high sustainability ambition in terms of energy efficiency, and three retail units constructed using mass timber. We closed the year on a high with the purchase of the stunning El Corte Ingles building in Barcelona which we will also transform into a highly sustainable, mixed-use prime location. Projects like these offer a mix of commercial uses in response to the latest market trends.
Expectations for the year ahead are again tough and challenging times call for creative solutions, so I think we’ll see an acceleration in the transformation of existing stock into new, mostly mixed-use properties, as well as a closer cooperation between landlords and tenants and innovation in the redevelopment and future-proofing of buildings, for example through biobased construction materials.
Repurposing and repositioning assets to create modern, sustainable tourist accommodation
Next to repurposing retail assets, we are also expanding our activities in the leisure and hospitality market. We see a growth in the youth tourism and experience travel market, where tech savvy and sustainable travellers are increasingly seeking out authentic, high quality yet affordable experiences. Last year we launched our Next Gen Stays strategy where we repurpose architecturally interesting but outdated buildings whilst upgrade their environmental footprints. We already acquired six seed assets across Spain and Portugal.
“Challenging times call for creative solutions”
Creating the largest European retail warehouse park portfolio
The retail warehouse park (RWHP) market was the strongest performing retail sub-segment in the COVID-19 pandemic period, thanks to the predominance of ‘convenience retailers’ such as hypermarkets
and DIY stores in the average rent roll, as these types of retailers were allowed to remain open during the lockdowns. By combining the properties of Germany’s redos with our existing retail parks, mainly in Belgium, we were able to create one of Europe’s largest retail warehouse park asset management platforms with €4.5 billion under management. With RWHP potentially also one of the most sustainable retail real estate sectors, due to its relatively low carbon intensity and potential for mixed-use ‘densification’ developments, we are well-positioned to create even greater positive impact.
Growing our organisation and expertise
Over the past year redos retained its operational independence. We used the time well to get to know our new colleagues, their culture and values a bit better, and we also introduced our purpose and mission. We are happy to see that our values are very similar. Whilst we can learn a lot from redos, our new team in Hamburg can build on our scale and skills. We are eager to speed up collaboration, work on launching a pan-European retail warehouse platform and grow our business -and ability to create positive impact- together.
I feel extremely inspired by the positive internal reception of our new mission as it clearly demonstrates the level of our team’s ambition in wanting to do good through our business. The drive they have shown is widely shared and expressed by our stakeholders: it is the passionate determination to not just overcome our immediate challenges, but to collectively and responsibly transition to a low-carbon, circular industry and lead the transformation of our cities into nourishing, sustainable and liveable urban spaces.
"I feel extremely inspired by the positive internal reception of our new mission."