Andrew Vaughan CEO

Transforming our cities into sustainable and liveable spaces

2021 proved to be a year full of twists and turns. At the start we were more hopeful, expecting to leave the pandemic behind us soon, but that was not the case. The restrictions had their impact on cities and urban areas, where Redevco is mainly invested.

Despite the enormous influence of COVID-19, both the economy and the real estate sector have shown incredible resilience. I was positively surprised how quickly people returned to cities for work, leisure, retail and to live, reminding us all that we are social animals at heart, and we do not want to do everything at home on our laptops. COVID-19 has accelerated the shift to considering environmental and social impactwhen deciding where and how we invest. To ultimately help our cities to make the transition to a cleaner, quieter and more sustainable future.

Cities need to transform at their core

Cities face incredible challenges to become more digital and sustainable and find ways to adapt to meet the changing needs of people. We strongly believe that we can help make cities nicer environments for citizens and visitors alike, by helping them become more sustainable and liveable. We will do what we can to improve the ESG performance of the portfolios we manage. In addition, we will actively contribute to changing the real estate investment and management sector to become low carbon, circular and resource efficient.

Retail assets become multifunctional destinations

We believe the best ‘value’ will be found in retail for those that understand the sector and are not afraid to take development risk to curate mixed-use environments that serve local needs and show positive social impact on the community. There is still a place for prime retail in quality locations and we have seen footfall bounce back in central, well-connected areas where consumers are demanding experiential shopping.

To help transform cities, there is a huge opportunity to redesign existing retail stock into multifunctional destinations: we have already been doing this for quite some time. A good example is the redevelopment of a property in the heart of Hamburg. Here we are creating a sustainable, mixed-use building with a floor space of around 15,000 m2 across ten floors. We are striving to make the new building as low carbon as possible from a whole lifecycle perspective, with the focus on an intelligent, sustainable energy concept and the recyclability of raw materials. Projects like these offer a mix of commercial uses in response to new ways of living and working in a society that is undergoing radical change.

“We strongly believe that we can make cities nicer environments for citizens and visitors alike, by helping them become more sustainable and liveable.”

Making our way into the residential sector

As cities attract more people, the need for more homes is apparent. We made two residential acquisitions in 2021. The Porseleinen Toren in Delft, the Netherlands, is a good example of creating suitable housing in one of the most densely populated parts of the country where there is also a massive shortage of high-quality rental accommodation. The development will be equipped with innovative technologies to minimise energy consumption, in line with our sustainability strategy. Another example is our Hollandse Meesters residential development. The apartments form part of a new complex at a former office location just 20 minutes from Amsterdam and will provide high-quality, sustainable homes in an area where, like in Delft, there is a huge housing shortage. These acquisitions are entirely aligned with our goal to invest in residential properties in the most attractive cities across Europe, and to help these areas become more sustainable and liveable.

Diversification and growth to drive greater impact

In addition to repurposing existing assets and investing in the residential sector, we plan to grow and diversify into other real estate sectors within the urban environment, which will enable us to increase our ability to make a positive impact. Our specialist investment strategies also focus on creating leisure and hospitality opportunities and modernising the retail warehouse parks landscape. In this context of growth and diversification, partnerships will play an increasingly vital role. They will include our existing clients as well as new ones, as we increase the number of separate accounts and create new joint ventures and other opportunities to collaborate. As a further option, we are also considering the acquisition of platforms that fit our strategy. Within our growth and diversification plans, we will continue to focus on making our entire portfolio Net Zero Carbon by 2040. This means that Environmental, Social and Governance (ESG) will progressively become an integral part of our investment approach, with a core focus on reducing carbon emissions and adding social value to the communities in which assets are located and developed.

Our organisation is evolving

To help drive the diversification of the portfolios we manage across property sectors and to establish investment strategies accordingly, Marrit Laning was added to the Redevco Board in the role of Chief Strategy and Innovation Officer. Marrit will also be harnessing the latest innovations with regard to the future of real estate and bring innovative solutions to the table to accelerate our sustainability journey. In 2021, we launched our NextGen Board as a platform for the young talent of our company. We have invited eight individuals from different functions, cultures and locations to provide new ideas and perspectives to strengthen our business now and in the decades to come. As Redevco’s Board, we are looking to be challenged by our younger employees, who bring creative solutions, less traditional views and their personal, relevant experience to the table. Our NextGen Board represents the voice of Redevco’s future.

My heartfelt thanks to the Redevco team for the positivity and commitment with which they have continued to run our business in a challenging working landscape. 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 transform our cities into nourishing, vibrant urban spaces for the future.

 

“In 2021, we launched our NextGen Board as a platform for the young talent of our company to provide new ideas and perspectives to strengthen our business.”

Subsequent events

A number of events have unfolded after the end of the reporting year 2021 that warrant a brief commentary:

  • Redevco acquired redos in April 2022, a Hamburg-based large-scale retail and urban logistics property and asset manager, managing over €3 billion AuM on behalf of three investor clients. We are excited about the possibilities this brings to scale our impact on climate action and other material topics.
  • The conflict between Russia and Ukraine has a major impact on the world, its citizens and the world economy. Redevco is continuously monitoring and assessing how potential financial, banking and monetary sanctions may be of influence on our business.
  • Similarly, rising inflation over the past months is having significant impact on supply chains and the availability and pricing of raw materials for our redevelopment projects. This uncertainty is undoubtedly impacting our tenants and their businesses too. Redevco will remain in dialogue with all relevant stakeholders to navigate these challenges in as balanced a way as possible.

 

Continue reading