With the publication of Inéa’s extra-financial report, Karine Dachary, the company’s Deputy Managing Director, gives an overview of the strategic choices and concrete actions that have made the listed property company a leader in Green Building in France.
These are pragmatic and ambitious choices, which have enabled the company to weather the crisis better than ever, and which it has decided to take even further in its new CSR roadmap.
In a few words, what is Inéa's positioning and investment strategy?
Inéa is a young property company founded 15 years ago. From the outset, its investment strategy has been based on the development potential of regional cities. At the time, their economic and demographic vitality already called for the creation of new sqm.
We therefore chose to invest exclusively in new-build property in the regions. We took the commercial risk of buying unlet office buildings off-plan, and creating value by letting them to high-quality private and public sector tenants.
Today, Inéa has a portfolio of offices and business parks valued at €920m.
Our 71 sites, spread across around ten major cities, are therefore recent (less than 7 years old on average) and resolutely human-sized (5,400 sqm on average).
What is your relationship with CSR?
We are sensitive to all environmental issues, and have been from the outset. What’s more, by investing in new buildings, we are fortunate to be at the forefront of innovation in sustainable construction.
We pioneered wood construction in the tertiary sector, offering the first tertiary park with a 100% solid wood structure in Aix-en-Provence back in 2013.
In 2016, we decided to translate this desire and commitment into a CSR roadmap that is both pragmatic and operational. For us, it wasn’t a question of communication, but of achieving results. Quite logically, we decided to make a commitment to :
- Building performance: by opting for new buildings, we benefit from the most recent requirements in terms of Thermal Regulations
- BREEAM in-Use certification of assets: a label dedicated to the operation of buildings, which offers an interesting range of multi-criteria CSR assessments (energy, water, health and well-being of occupants, pollution, etc.).
- And good energy and environmental management of assets – in particular through the automatic recovery of consumption data (energy and water). It was to address these issues that we tested and then rolled out iQspot.
“iQspot was the most pragmatic, reliable and long-lasting solution.”
Why did you choose iQspot?
Because it was the most pragmatic, reliable and sustainable solution. And therefore the most relevant.
The other players in the market were all offering systems based on the recovery of supplier invoices. At first sight, this seemed like a nice system, since it involved retrieving data that already existed, but it was Dantean if you considered that we had to ask all our tenants (270 today) for the invoices, and without any guarantee of the method’s long-term viability (a simple change of contact person at our tenants’ premises could jeopardise it).
Thanks to the iQspot solution and the installation of sensors on the energy and water meters and sub-meters, the data is now available in real time. This has a number of advantages:
- Data collection is automated,
- We are no longer dependent on fluid suppliers,
- And we have a detailed view of consumption (by zone, by use, etc.).
We started equipping a few assets in 2016 and have since rolled out the system across the board, deploying more than 350 sensors. Today, iQspot has become an everyday tool for the overall monitoring of our facilities.
How do you use it?
We use iQspot mainly on two levels.
First, for our annual Corporate reporting. Each year, we can publish our overall consumption data and benchmark it. This is the consolidated data on energy and water consumption. The energy data is available in final energy, primary energy and associated GHG emissions.
Secondly, for the daily management of assets, via our Property Managers who immediately saw the benefit:
- As soon as iQspot was installed, they were able to carry out adjustment audits; in particular, to adapt the thermal settings according to the actual occupancy periods. Only real time allows us to see on a daily or weekly basis whether the reductions are correctly programmed in the evenings and weekends. And if this is not the case, to correct the situation and achieve substantial energy savings.
- Then, thanks to real-time alerts, they are notified directly by email in the event of a consumption drift. A feature that allows, for example, to immediately detect water leaks… and to resolve the problem immediately, rather than 2 or 3 months later.
- Finally, the system is an asset in the relationship with tenants. Firstly, to feed environmental annex meetings. Arriving with updated data each year allows for richer and action-oriented discussions. As a lessor, we can show what we have done in terms of managing general equipment (HVAC optimization, switching to LED, etc.). Tenants become more inclined to do their part, particularly around usage. Everyone contributes to controlling costs and reducing the environmental footprint… Even if some behavioral changes still require work to be adopted.
And more prosaically, having precise and factual data also allows doubts to be removed as to the origins and responsibility of possible overconsumption. Having this “justice of the peace” helps maintain a relationship of trust with tenants.
What results have you achieved so far regarding to your CSR strategy?
The results measured at the end of 2020 make us particularly proud and reinforce our feeling of being a leader in Green Building in France.
First, in terms of building performance: to date, 9% of the national office stock benefits from a level of performance equivalent to or higher than RT 2012. At Foncière Inéa, this rate is 60%!
The modernity of our stock guarantees its intrinsic real estate quality.
Regarding the Breeam in-Use certification, as a reminder, France had around 650 certified office assets at the end of 2020. Breeam in-Use is the most widely distributed label in the region.
To date, 89% of Inéa’s assets have undertaken this certification process.
Even more significant is the result of these certifications: 90% of our assets already certified are with a level greater than or equal to “Very Good”. More precisely, 56% in “Very Good” and 34% in “Excellent”.
“In 7 years, we have already achieved 31% energy savings!”
And what about energy savings?
Having our consumption in real time is already a result in itself. For us, the question raised by the Tertiary Decree of “how to collect” has long been resolved. And this also contributes to a better rating in the Breeam in-Use benchmark.
Thanks to this data, we can now concretely measure the progress made since 2012: in 7 years, we have already achieved 31% energy savings!
This commitment also translates quite logically into an average surface consumption much lower than that observed on the market. With 116 kWh of final energy consumed per sqm in 2019, our office park is 38% more energy efficient than the average published by the OID.
These excellent results already allow us to project ourselves in relation to the 2030 objectives of the tertiary eco-energy system recently published. Still based on the 2019 figures (2020 was a special year in terms of occupancy rates [Editor’s note: and considered unrepresentative in Order No. 2 of the Tertiary Decree published in January 2021]), 80% of our assets already meet the 2030 objectives and would obtain the Tertiary Eco-Energy label. Nine years before the deadline.
Of the remaining 20%, 13% will only require a few marginal efforts to meet the threshold. Ultimately, only 7% of assets will require additional investments. These figures should be compared with initial studies indicating national rates of 30% of sites already compliant, 30% of sites requiring some adjustments and 40% of sites where heavier investments will have to be planned.
This is a huge competitive advantage. This means that we do not have to commit to any energy renovation CAPEX in the next 9 years; and that our office assets are protected from a possible drop in value linked to these new regulatory constraints.
What are the next steps you are considering to improve the environmental efficiency of the portfolio you manage?
We will continue to optimize energy and water consumption, by involving our tenants more and more. Our new multi-year CSR roadmap, which starts this year, naturally takes this into account. It also includes new objectives, in line with the national environmental trajectory 2050. Carbon neutrality, waste management and biodiversity take on a new role. To do this, we are considering several areas of work, including:
- The development of renewable energy production. One of the opportunities we have in the region is to have space, and generally outdoor parking. A real potential for the installation of canopies equipped with photovoltaic panels.
- Geoenergy for its particularly interesting aspects in terms of decarbonization of thermal energy and land valuation.
- The reforestation of sites, presenting a benefit in terms of amenity and carbon capture,
- The selection of increasingly ecological construction materials. Beyond the 40,000 sqm of 100% wood tertiary space that we already own, we will continue to be a driving force for proposals from the design stage of the assets – which our VEFA investment strategy allows us to do.
- Participation in compensation programs is also one of the levers that we plan to use to achieve carbon neutrality.
“Ultimately, there will either be a premium for buildings with no CAPEX to commit, or a discount for the others.”
Do you think this policy will have an impact on asset valuation?
So far, it cannot be said that the “green value” of assets is really taken into account in arbitrations. But it is a safe bet that under pressure from the market and legislation, things will change quite quickly. The Tertiary Decree imposes objectives for significant consumption reductions in the medium and long term. Owners who are keen to comply with the law will have to plan the investments necessary to achieve them. In the long term, there will in all likelihood be either a bonus for buildings with no CAPEX to commit, or a discount for the others. As far as we are concerned, we are calm since, from this point of view, we will not run any risk of deterioration in the value of our assets.
Finally, an essential question in these very special times: what were the impacts of the health crisis on your activity in 2020? Are they comparable to those observed in Paris?
We are very lucky, since we have had few tenants impacted by the crisis. In 2020, we had a rent collection rate of 99%. And the remaining percentage concerns rent spreading. It is true that office and business park assets have generally resisted better than others, which are more exposed. But our new buildings, in the region, and on a human scale have proven to be particularly resilient in the context of the health crisis:
- The occupancy density is structurally lower than in the city center, especially in the CBD. The space already existing between workstations makes it easier to implement social distancing.
- In a 2 to 3-story building, it is possible to use the stairs rather than the elevators, places of high promiscuity, not recommended during a pandemic.
- The possibility of opening the windows is a real asset when ventilation becomes a health issue.
These features, to which we can add the existence of terraces and outdoor areas, have made our buildings more pleasant workplaces to live in and more compatible with the constraints imposed by the context. Our buildings were more frequented than average: 25 to 30% occupancy during the first lockdown, and 50 to 55% during the second. This is what we were able to deduce from the study of water consumption in common areas (toilets, canteens). Knowledge of the activity of a building by remote data reading allows for numerous and valuable analyses.
We thank Karine Dachary for sharing with us the keys to Inéa’s success.
We are proud and honored to support one of the leaders in Green Building in France on a daily basis.
Do you also want to move forward on the subject of the energy performance of your buildings? Let’s talk about it together.
