Sustainability of real estate accelerated by BNG Bank, NN Group and Bewust Investeren
1 May 2018
A special financing proposition has been developed for this purpose. A foundation to be set up in the municipality will purchase a building in need of improvement and make it more sustainable. After 30 years, ownership of the building will revert back to the municipality. The aim of the collaboration is to put at least 10 million square meters of social real estate on a more sustainable footing over the next ten years. BNG Bank and NN Group have together made EUR 300 million in funding available for the purpose of Bewust Investeren over the next two years.
Bewust Investeren focuses on the broad interpretation of sustainability: the environment, society and good governance. The proposition has been developed in response to the challenge faced by municipalities to make their real estate more sustainable. There is a desire and need to meet the climate targets, but tight budgets and a lack of knowledge, experience and time are standing in the way of the transition to the rapid sustainability of their real estate. While municipality residents are already using smart meters, alternative sources of energy and insulation, the approach of social real estate is lagging behind. Bewust Investeren’s solution ensures a fast improvement of buildings that would either not be carried out at all or not until much later.
Gerben Dros, founder of Bewust Investeren: “In the Netherlands, I see so many social buildings in which people work, learn, play sports and spend their leisure time that have not been made sustainable and are poorly maintained. . Municipalities are calling on their inhabitants to champion sustainability, but are not leading the way themselves. This must and now can be done differently. Together we bear responsibility for our fragile environment, for people who should be able to feel healthy and well in buildings and for management that has to be careful with limited resources. It is a conscious investment in our future.”
Impetus by BNG Bank and NN Group
The joint venture means that sustainability will be tackled more rapidly by implementing and financing projects. The initiative responds to prevalent social themes, including the need to improve school buildings in the Netherlands and place them on a more sustainable footing. Bewust Investeren’s solution is already achievable for an individual primary school, sports complex or multifunctional accommodation. Municipalities can consequently continue to focus on their core tasks whilst institutional investors fulfill their wish to also have a positive impact on the environment and social factors in addition to generating a financial return.
Jelle van der Giessen, Chief Investment Officer of NN Group: “Our role in society extends further than creating value for shareholders. NN Group wants to achieve long-term value for a broader range of stakeholders: customers, employees, shareholders, business partners and society at large. The choices we make today have an impact on tomorrow’s economy and society. Bewust Investeren’s proposition enables us to invest very specifically in the sustainability of real estate in the Netherlands. I am pleased that we have been able to develop this proposition together with our asset manager NN Investment Partners (NN IP).”
Pauline Bieringa, director of public Finance at BNG Bank: “BNG Bank is the largest financier of social real estate in the Netherlands and one of the largest financiers of the Energy Agreement. The bank is happy to facilitate municipalities that want to put their real estate on a more sustainable footing. We are therefore pleased that we are able to offer this financing in collaboration with NN Group.”
Municipalities benefit from the unique proposition
Bewust Investeren organises the financing and sustainable improvement of social real estate for municipalities. The municipality releases funds from the sale of the property to a jointly established foundation. The foundation and long-term lease structure ensure that the municipality has a supervisory role and retains the strategic ownership of the property. In addition, Bewust Investeren puts the long-term maintenance out to contract. The municipality rents the building for 30 years, with a break clause after 15 years. The ground rent covers the investments and costs. After the end of the lease period, the foundation will have repaid the financing and ownership reverts back to the municipality. This unique proposition means that municipalities can use highly sustainable real estate at low and predictable costs, with Bewust Investeren taking on much of the maintenance burden for the municipalities.
“We can bridge the gap between institutional investors and municipalities to invest in the sustainability of the Netherlands”, said founder Bart Hoevers of Bewust Investeren. “BNG Bank is the largest financier of municipalities. NN IP has made the proposition of Bewust Investeren attractive for institutional investors who want to invest sustainably in the Netherlands. BNG Bank and NN IP are pioneers in sustainable financing and investment, taking account of ESG criteria. These partners enable us to achieve our goal.”
This initiative is also an opportunity for the property of social housing associations that is already leased to municipalities in the long term. The approach of Bewust Investeren means that this property can be sold and made sustainable, whit the municipality remaining the long-term user of the building. The housing associations can in turn use the sales proceeds to improve the sustainability of their housing portfolio. The three parties will report on the impact achieved in the context of this collaboration.
More information on Bewust Investeren can be found on their website.