Cooperation and engagement with our tenants and other stakeholders is an essential part of our sustainability strategy. We firmly believe that we can achieve the most by working with all our clients and other stakeholders, sharing ideas and devising innovative solutions to the challenges we all face.
We conduct a bi-annual tenant satisfaction survey to gather the information we need to promote the interests of our tenants. As in previous years, we discussed the results with our property managers and agreed targets, all aimed at further improving tenant satisfaction. The key results of most recent survey (2015) are:
Tenant satisfaction has dropped slightly as a result of the predominantly negative sentiment among retailers in general.
Encourage ESG criteria
In the context of tenant engagement Bouwinvest believes it is important to test our tenants on financial and ESG criteria and to use our influence as much as we can.
Our nr.1 tenant, Primark, is the retail business line of the London public listed Irish company Associated British Food. Primark itself is employing 68,000 people and has over 300 store locations. Currently ABF nor Primark haven’t signed the United Nations Global Impact principles yet. These principles are aimed at CSR in the areas of human rights, labour environment and anticorruption. ABF and Primark are encouraged by their stakeholders to consider signing up these principles. Other sources to obtain information are studies of Rank a Brand and Robeco SAM. In August 2016 Rank a Brand scored the first milestones for Primark. One of the milestones is the Code of Conduct, designed to ensure that the suppliers Primark works with respect the risks of their workforce. It sets out the core principles that suppliers and factories must follow to ensure products are made in good working conditions, that the people making them are of a legal working age, are treated decently and paid a fair wage. Of course ethics policies need to be done not only by commitment or announcement, but they should be put in practice. Primark employs a team of 65 audit specialists, supported by external companies, who are based on the ground in nine key sourcing countries. In November 2016 Robeco SAM published the report: "ESG risks and opportunities in the textile sector". Their conclusion is that Primark is making progress in implementing the concerning policies, and is taking her Responsibility.
In 2016, the Fund continued to increase assessments in it's portfolio using DUO Labels as part of its tenant engagement programme. By year-end 2016, we had completed the assessment of all suitable units and our main challenge for the future is to convince our tenants that cooperation makes good business sense, both in terms of environmental impact and cost savings. The DUO Label system assesses the resource efficiency of tenants’ retail units and offers practical advice on achieving sustainability goals. An Energy Map provides tenants with a micro-view of their energy consumption. This map outlines the efficiencies and inefficiencies of areas controlled by the lessor – such as roof, flooring and wall insulation – but more importantly, it analyses the areas controlled by the tenant, including the storefront, climate control, ventilation, lighting and escalators.
The map highlights problem spots, compares the store to the centre average and provides advice on how to reduce energy consumption. These maps serve as a starting point for discussion with the retailers on their energy consumption and potential savings.
We are currently preparing for the second phase in this process, which will involve gathering data from our tenants and setting targets via green leases or sustainable user agreements in lease contracts.
Managing the supply chain
The Retail Fund has Service Level Agreements with its suppliers in the chain. We assess property managers each quarter on topics related to administrative management, technical management (including sustainability), commercial management and tenant satisfaction.
The Retail Fund applies ‘Bewuste Bouwers’ criteria to all new-build projects and redevelopments. These criteria ensure that the contractor deals with the concerns of local residents, and addresses safety and environmental issues during the construction phase.
To promote and increase sustainable procurement we launched a project with IVBN (Association of Institutional Property Investors in the Netherlands) and a number of fellow fund managers to engage and assess the Fund’s suppliers using a sustainability web tool. Current and future suppliers will be assessed on their sustainable commitments, policies and behaviour.
Pilot smart real estate management and maintenance
In 2016, the Fund has conducted a successful pilot with an online management concept for the effective management and maintenance of properties. The tool supports the Fund to register, schedule, manage and monitor standard inspections and legal inspections, as well as evacuation exercises, certifications and insurance policies. The tool helps the Fund to reduce its strict liability and total costs of ownership. It can lead to savings of up to 15% while minimising user costs, maintaining the quality and value of the properties and preventing unwanted vacancies. The Fund is planning to further implement the tool in 2017.
Partnerships with local government agencies
The city of Lelystad is a prime example of how we work with private and public parties on initiatives to inject new life into urban centres. Lelystad is going through a difficult period, with high vacancy rates in its main shopping area. The Retail Fund has teamed up with its tenants, a number of fellow investors and the business community to take initiatives together with the local authorities, residents and cultural organisations with the aim to inject new life into the city centre. These initiatives include public and private investments in the city centre, the set-up of a Business Improvement Zone, the joint determination of a future vision and the execution of a marketing and branding programme.