a.s.r. vastgoed vermogensbeheer

Sustainability & Integrated Shopping Center Management

The portfolio of ASR DPRF has been aggregated over 100 years, which has resulted in a Dutch high street portfolio of unparalleled quality. The addition of shopping centers took place more recently and provides the portfolio with great opportunities as well as challenges. One of the opportunities concerning shopping centers is within the realm of sustainability.

In the case of solitary high street retail, the landlord’s responsibility towards the property is generally restricted to the maintenance of the façade, roofing and foundation works. This has a limited impact on the operational activities and relies more on having a good partnership with retailers and agreeing on sustainable targets in the leases. Therefore, the Fund’s CSR Policy 2018-2020 includes the objective of 100% ‘green leases’. When it comes to fully-owned shopping centers, the landlord’s responsibility and impact goes further and extends to the public space and the communal areas of the center.

Klanderij

The ASR Dutch Prime Retail Fund was very proud in 2014 when the Klanderij, an inner city center development, was awarded with BREEAM ‘Very Good’ for the first In-Use shopping center in the Netherlands. Unique to this process was the fact that, because all tenants agreed to participate, it was the first shopping center with 100% coverage for the BREEAM label. To the Manager, this has served as a prime example that collaborating with tenants can enhance the quality of the asset and reduce energy consumption, increase the recycling of waste, and serve consumers with public facilities while maintaining a total return target. The graph below shows the service charges payable by the tenants, in part due to the sustainability measures implemented by the Fund. Electricity as a percentage of the service charges decreased by 3% points and the overall service costs decreased by more than € 25k over four years. As service charges are costs borne by the tenants, a decrease can lead to a higher potential rental income for the Fund and limits the total occupation costs for the retailer.

Service charges for the Klanderij

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The Klanderij was disposed of at the start of 2016 for commercial reasons, yielding a premium compared to the fair value as at Q2 2015. It is important to stress that the disposal could have caused a reduction in the Fund’s GRESB performances for 2017, as this asset was 10% of the fair value of the Fund and >50% of the BREEAM labels. The fact that the Fund still managed to improve by + 4.8% emphasizes the continued effort and increases in other areas relevant to the GRESB.

DSC Vleuterweide and Vathorst

ASR DPRF has a sincere belief that sustainability is an integral part of maintaining an attractive portfolio. Indeed, BREEAM In-Use labels are a target for the Fund’s fully-owned shopping centers. In 2017, Vleuterweide and Vathorst will apply for the BREEAM In-Use labels, resulting in a higher percentage of BREEAM In-Use coverage for the Fund. Although labels are mere tools to achieve a goal, the recommendations in the labels can help the Fund to increase its sustainability targets and boost the tenants’ bottom line by reducing service charges, when applicable. The CSR Policy for 2017-2019 states that the Fund will aim for BREEAM In-Use labels for all fully-owned DSCs and, by achieving that target, the Fund will add an additional 15% to the portfolio’s BREEAM coverage.

BREEAM labeling

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Going forward

By pursuing the ambitions discussed above, the Fund will increase its BREEAM labels by a significant amount, furthering the Fund’s CSR target and adding future value to the portfolio. The Klanderij case study shows how increasing an asset’s sustainability performance can improve the management of these larger assets and possibly add to the bottom line of tenants in shopping centers.

For more information on the Fund and its sustainable efforts, please contact Lizzy Butink or Luc Toren.

Lizzy Butink
Sustainability manager
ASR REIM
M: +31 (0)6 51 19 07 74
E: lizzy.butink@asr.nl

Luc Toren
Associate Fund Management
ASR Dutch Prime Retail Fund
M: +31 (0)6 53 31 16 80
E: luc.toren@asr.nl