Investing responsibly in real estate with SCPIs

SRI, taking into account extra-financial criteria

Responsible investing is commonly understood to mean investing in companies that integrate extra-financial criteria into their development, such as environmental protection, respect for social rights and good corporate governance (ESG criteria). These companies must be "citizens", attentive to working conditions, climate change and business ethics....

SRI for real estate consists of integrating environmental, social and governance issues into the acquisition and management processes of buildings, and ensuring regular reporting to investors.
SRI makes it possible to better anticipate and manage risks (climatic, reputational, etc.) with the aim of preserving or even increasing the value of real estate assets over the long term*.
In other words, a responsible investment is an investment that can reconcile performance with social and environmental impact.

SRI, a priority issue for SCPIs

The building sector is very energy-intensive. According to the Ministry of Ecological Transition and Solidarity, it accounts for 44% of the energy consumed in France and emits more than 123 million tons of CO2 per year, or nearly a quarter of national emissions, in 2019. In other words, it is one of the most energy-intensive sectors. Reducing the environmental impact of buildings is therefore a priority. This is why, for the past ten years, the public authorities have adopted strict regulations aimed at making new constructions more energy efficient and imposing a massive renovation of existing buildings.

As a major player in the real estate sector, SCPIs (solution d’épargne immobilière) ave a role to play in the energy transition. They are at the forefront of integrating ESG criteria into their choice of investments and the management of their real estate assets. Aware of their responsibilities, SCPI managers adopted a Charter of Commitment in 2016 to promote the development of SRI management in real estate. They also actively participated in the development of the SRI label of real estate funds in force since October 2020, a label designed to give greater visibility to SCPIs committed to a socially responsible investment approach.

The SRI approach of the management company Praemia REIM

Praemia REIM, the leader in the SCPI market, has enabled you to invest in socially useful real estate sectors that have a positive impact on society, such as healthcare/education real estate and intermediate housing.

Praemia REIM has developed a proprietary methodology to integrate ESG criteria into its real estate acquisitions and asset portfolio management. For example, 100% of the real estate acquisitions of the SCPI Primopierre, which is mainly invested in office real estate in the Paris region, are subject to an extra-financial rating based on 90 ESG criteria. The objective of the SRI strategy of SCPI Primopierre is to ensure that its portfolio continuously improves its extra-financial performance. This policy allows the fund to maintain or increase the quality of its assets over time and to strengthen ties with tenants by optimizing the use and quality of life within the buildings.

According to Stéphanie Lacroix, Managing Director of Praemia REIM, the choice of SRI in real estate should provide investors with attractive financial performance over the long term because ESG criteria increase the life and value of real estate assets over time. On the contrary, properties that cannot demonstrate ESG performance will be less liquid over time and therefore less valuable.