INFRASTRUCTURE AND REAL ESTATE: LONG-TERM INVESTMENTS BUILDING EUROPE’S FUTURE
Infrastructure and real estate, together, create Europe’s built environment where people, live, work and enjoy leisure activities. As asset classes, they are long-term investments that generate the returns pension funds and insurance companies need to meet their obligations to stakeholders while stimulating the economy and creating jobs.
Investments in infrastructure and real estate are mutually dependent and, as a result, neither would be successful alone. Moreover, synergies are created when investments in infrastructure and real estate follow a coherent path.
During Invest Week, on 23 November 2017 in Brussels, EREF, European Real Estate Forum, together with the Long-Term Investment and Reindustrialisation Intergroup sponsored an event at the European Parliament exploring how infrastructure and real estate are long-term investments that are working together to build Europe’s future.
The panel was joined by Dominique Riquet, MEP, Chair of the Long-Term Investment Intergroup; Wolf Klinz, MEP; Brenna O’Roarty, RHL Strategic Solutions; Hauke Brede, Chief Risk Officer at Allianz Real Estate; Hans Op ‘t Veld, Head of Listed Real Estate for PGGM; Jeroen Reijnoudt, Senior Fund Manager of International Real Estate at Mn Services and David Percheron, Permanent Representative of Caisse des Dépôts Group to the EU. Jeff Rupp, Director of Public Affairs at INREV, moderated a lively discussion focused on the similarities and synergies of infrastructure and real estate investment.
THE CONTRIBUTION OF REAL ESTATE TO VITAL, LIVEABLE CITIES
Breakfast roundtable hosted by the European Real Estate Forum and the Urban Intergroup on Wednesday, 29 November 2016
Commercial property makes a major contribution to Europe’s growth, jobs and sustainability, pumping some €329 billion into the economy in 2015. A panel of experts gathered for Invest Week 2016 highlighted the ways their investments are making Hamburg, Paris and cities across the UK far better places to live and work.
- Commercial real estate invests €252 billion annually in building refurbishment and development in Europe.
- Real estate employs 3.7 million people, more jobs than the automotive/telecoms sectors combined, and is critical to achieving the EU’s energy and sustainability targets.
- Investors call for the EU to complete the single market as they struggle with different rules in member states.
The professional knowledge that investors can bring is crucial to the development of cities; noted Jan Olbrycht, MEP. He called for them to be part of an ecosystem of decision-makers ‒ including policymakers, planners and citizens ‒ working together to achieve sustainable and accessible urban development.
HafenCity, a huge waterfront site in Hamburg, was cited as a great example. The waterfront is being renovated as an entirely new part of the city, extending its size by 40%. The area is being made attractive for people to live, work and play with a vibrant mix of buildings, shops, restaurants and culture. ‘This mix creates a sustainable and viable community as well as a good return for investors,’ said Jürgen Bruns-Berentelg of HafenCity Hamburg. He pointed out that private investment (€10 billion) there exceeded public investment by a factor of three.
In the UK, Nick Manley from the University of Cambridge spotlighted Birmingham and Manchester, where private investment and the creation of shared spaces have tackled a post-industrial legacy of high unemployment and population decline. He noted that this is achieved by channelling the savings of millions of people into real estate through institutional investment yet he cautioned that policymakers should be aware of the big risks involved for investors.
Paris, this event’s third case study, has seen a more surgical approach. ‘We believe development on a building-by-building basis can be key to urban revitalisation,’ said Brigitte Sagnes Dupont, whose company Oreima has focused on projects in the city’s historic centre, preserving heritage through renovation.
How can Europe learn from these city developments, asked moderator Jeff Rupp. Participants noted the importance of sharing best practice with the public sector, developing infrastructure alongside real estate, mapping urban data and disincentives to investment, and benchmarking sustainable investment. According to Guido Verhoef, of PGGM, Europe is good at making long-term investments in cities, compared to the United States. But it must complete the single market, as it makes no sense for real estate investors from one EU country to struggle with different rules in another.
REAL ESTATE INDUSTRY SUPPORTS EUROPEAN JOBS, GROWTH AND INVESTMENT AGENDA
The European Real Estate Forum hosted a successful first public event in Brussels focused on the role of real estate as a long-term investment and its contribution to vital and sustainable European urban areas, European growth, job creation and sustainability.
The event, on Tuesday 4 November, came two days ahead of the European Commission’s ‘Finance for Growth’ conference, which follows Commission President, Jean-Claude Juncker’s announcement of a €300 billion stimulus package for Europe.
The panel at the EREF event included Philippe de Backer, MEP; Karel Lannoo, CEO of the Center for European Policy Studies; and Patrick Kanters, Managing Director Real Estate and Infrastructure for APG Asset Management. Dirk Brounen, Professor of Real Estate at Tilburg University in the Netherlands, moderated a lively discussion, which covered key topics from the need for a more coordinated policy approach to stimulating key investment, to the significance of sustainably responsible investment, and the importance of avoiding over-regulation in the future.
Patrick Kanters noted: “The real estate investment industry is central to economic activity across Europe, so this event was timely and significant. It illustrated how important it is for us to maintain a well-informed, open dialogue with policymakers to ensure we can continue to play our part fully in the economic growth agenda for Europe.”
The 28 associations forming the European Real Estate Forum will continue to work together to ensure increased understanding amongst policy maker on the contribution of real estate investment to the real economy.
EUROPEAN COMMISSION URGED TO DEVELOP AN URBAN AGENDA WITH CLEAR FOCUS ON REAL ESTATE INVESTMENT
Sixteen EREF organisations encouraged the European Commission to develop an urban agenda with a clear focus on real estate investment.
The response to the Commission consultation on an urban agenda can be downloaded here (response to COM URBAN consultation) – September 2014
Property associations call for European Parliament URBAN Intergroup with strengthened real estate focus
The European Real Estate Forum (EREF) have prepared a letter to the European Parliament urging for the continuation of the URBAN Intergroup with a strengthened real estate focus.
The letter emphasises that the Intergroup could help address the following key issues:
- Access to long-term finance and investment
- The role of real estate in the economic recovery of the EU
- Sustainability (e.g. the energy efficiency) of the current building stock
- The importance of infrastructure including real estate
The Importance of Real Estate to the Economy