Mr Dulon, can you tell us a bit about your role and your main tasks at Quaero Capital?
I’m Director of Asset Management at Quaero Capital. I develop and implement the financial and extra-financial strategy for our two funds:
- Foncière Quaero I, a €100m fund made up of value-added office assets spread across France (Greater Paris and major French cities),
- Educatio, a vehicle with a target size of €200m, the first fund dedicated exclusively to education property.
In this role, I work closely with the investment department, in particular on setting acquisition targets, due diligence (to ensure we have a thorough knowledge of the assets) and asset disposals.
I’m also responsible for operating and enhancing the value of the buildings under management.
I coordinate all the players involved throughout the asset management cycle: architects, consultants, property managers, including iQspot, for example.
What is the positioning and investment strategy of Quaero Capital's Real Estate division?
Quaero Capital is a Franco-Swiss asset management company founded in 2005, which developed a real estate business in 2018. We stand out in the market through :
- An original investment strategy, which leads us to select assets :
- Generally smaller (2,000 to 5,000 m²) than those looked at by the big traditional players,
- With more complex financial packages, in particular through the purchase and valuation of leasing contracts,
- Located throughout France (Paris and major cities); we have genuine expertise in the regional markets in which we operate,
- We have real expertise in the regional markets in which we operate, where we carry out refurbishment, redevelopment and even change of use work
- Specialised skills in 3 complementary areas: asset restructuring, active asset management and financial engineering,
- Real proximity to tenants, and a particular focus on controlling service charges,
effective consideration of environmental issues in our refurbishments and in the management of our buildings.
Our aim is to reposition our acquisitions for rental purposes and look after the interests of our tenants.
It’s a strategy that guarantees higher income and better liquidity for our assets.
Can you illustrate this?
To give you a concrete example, we bought out the lease on a building in the 13th arrondissement of Paris, which was occupied by Pôle Emploi. We demolished and rebuilt the building, taking it from 1,600 sqm to 2,850 sqm. We will deliver a turnkey building to the Galileo Global Education Group at the end of 2022.
In another example of optimising rental management, we refurbished the entire shell of an ageing building in Rueil Malmaison, including insulation and renovation of the communal areas.
The result is a loyal tenant base, with an increase in the leased area and average rent, and new tenants for vacant plots.
“Tenants are becoming more loyal, with an increase in the surface area leased and in the average rent, and new tenants are taking up vacant lots.”
What role does responsible investment play in this? How do you address this issue?
Quaero Capital has been a signatory to the PRI (Principles for Responsible Investments) and CDP (Carbon Disclosure Project) charters since 2015. We received an ‘A+’ rating for Strategy and Governance in the annual PRI 2020 assessment. Our Educatio fund is in the process of obtaining SRI certification.
Our value proposition is closely linked to a sustainable vision of investment:
- During the construction or refurbishment phase, through choices geared towards low consumption/emissions,
- In the operating phase, through energy management, including
- Real-time monitoring and control of consumption with iQspot
- And raising tenants’ awareness of how to optimise consumption.
This is how we came to acquire an obsolete building in Nantes, which we renovated by upgrading the existing structure. The building is now more efficient, and energy (and water) consumption is monitored in real time. This knowledge of consumption means that we can easily meet our reporting obligations under the tertiary sector decree.
What we’re seeing is that, for tenants today, controlling costs is becoming a real issue. More and more, energy management, and therefore the level of service charges, is a factor in the choice of a prospective tenant.
How did you come to choose iQspot, and why did you choose this solution?
In 2019, we had to anticipate the Tertiary Decree. We had seen how complicated it was for Property Managers to collect invoices. We wanted to avoid this pitfall.
That’s when Julien Bruneau [editor’s note: founder and CEO of iQspot] contacted me and presented the solution. It seemed to make perfect sense, and the quality/price ratio was easily digestible, whatever the size of our assets, large or small.
We equipped the first 2 buildings in December 2019. We were very satisfied with the monitoring and the associated energy management, which is very well done. The reliability of the data is beyond reproach.
We have continued to equip our portfolio in 2020 and 2021 and plan to monitor all the Educatio fund’s assets with the solution.
Do you have a specific testimonial, or even figures, to share about the impact of energy performance on the return on your assets?
Real estate is a transmitter. We have in our hands a powerful lever for action. For us, it is clear that the energy and carbon performance of our properties has a positive impact on the environment and on our tenants’ perception of their workplace.
It is difficult to put a figure on the impact of energy performance alone. It’s a whole, of course. For example, we address other ESG issues that play a positive role:
- Integrating services that encourage soft mobility (recharging stations, bicycle storage areas, showers, etc.),
- Good management of water resources (with iQspot, for example, we have been able to detect leaks in watering and flushing systems),
- The systematic inclusion of environmental appendices in our leases, whatever the surface area rented, and regular discussions with our tenants to raise awareness.
We have found that addressing ESG issues does more than just stabilise the rental situation; it also improves the rental and transactional liquidity of our assets.
As a result, our tenants are becoming more loyal and are expanding within our portfolio, despite a highly competitive environment.
What are the next steps you plan to take to improve the environmental performance of the assets under your management?
We will, of course, continue to refurbish assets that need it.
We also know that proper operation and optimisation of usage play a key role in performance. This is why we have undertaken to raise awareness among :
- Our service providers, particularly those responsible for the maintenance and operation of HVAC systems. We’re asking them to optimise the systems and check the settings for reductions. iQspot helps them do this on a daily basis.
- Our tenants, by providing regular information on best practices (eco-gestures), and through annual green committees. This is an ideal time to give an overview of the building and look to the future together. This is where we determine what joint action needs to be taken, in particular to meet the challenges of the tertiary sector decree together.
In this context, iQspot enables us to :
- Have a factual, quantified account of consumption items, which we can use as a basis for our discussions,
- Highlight the savings made
- Measure the impact of actions taken,
- And to communicate on the technical investments we are making, which tenants might not otherwise be aware of. These investments help to control costs and improve the environmental performance of the premises they occupy.
Generally speaking, iQspot contributes to positive and constructive communication with our tenants. We can demonstrate the attention we pay to optimising our management, and create the conditions for convergent action between them and us.
This helps to maintain good relations, and ultimately to improve the overall performance of our assets.
We plan to enhance this performance, on a case-by-case basis, through labelling.
Would you also like to benefit from the advantages of the iQspot solution? Interested in a demo?
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