2018 GRESB Real Estate Results | North America
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Thursday, September 20th Hosted by Alexandria Real Estate Equities, Inc. (NYSE: ARE) and supported by our North American Industry Partners NAREIT, PREA and REALPAC.
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2018 GRESB Real Estate Results | North America
- 1. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
- 2. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
- 3. 2013 2011 2012 2014 2015 2016 2018 Global Average 2017
- 4. 2013 2011 2012 2014 2015 2016 2018 Global Average 2017
- 7. Listed still in the lead…. Private Listed
- 8. …as is Australia / NZ Europe Asia Australia/NZ North America
- 9. US drives the North American average North America
- 11. So… what next?
- 13. LISTED REAL ESTATE MARKET COVERAGE in % of market capitalisation Europe 78.02% North America 58.40% Asia Pacific 49.47% Total 61.21%
- 15. All new buildings must operate at net zero carbon by 2030 100% buildings must operate at net zero carbon by 2050 Sustainable Real Assets
- 16. Performance assessments based on reliable data Healthy Resilient Efficient Sustainable Real Assets Connected Healthy Resilient Efficient Certified Business continuity Positive social impact Green lease AccessibleMonitored
- 17. Healthy 2016 2017 174 252 2018 297 North America Europe Asia Aus/NZ Other Leaders 62 127 155 % participants 23% 30% 33%
- 19. GRESB Universe (Like-for-like) GRESB Universe Target UN SDG Target 7.3 (2.6%) Efficient 2017
- 20. Efficient GRESB Universe (Like-for-like) GRESB Universe Target UN SDG Target 7.3 (2.6%) 2017 [10%] Absolute [30%] Like-for-like [29%] No target [31%] Intensity based
- 21. Efficient 0 25 75 50 100 2010 2020 2030 2040 2050 GRESB Universe (Like-for-like) actuals 2017 UN SDG 13 Target GRESB Universe Target
- 22. Efficient 79,388 total assets 49,910 reported at asset level 74% of total entities 53 countries 834.3 million sqm
- 23. Efficient 79,388 total assets 49,910 reported at asset level 74% of total entities 53 countries 834.3 million sqm 20,000 15,000 10,000 5,000 0 85% 62% 71% 57% 41% 49% 29% Total Assets Reported at asset level
- 24. Efficient Office 181 kwh/m2 200 kwh/m2 135 kwh/m2 134 kwh/m2 159 kwh/m2 147 kwh/m2 173 kwh/m2
- 25. 182 kwh/m2 247 kwh/m2 Office 181 kwh/m2
- 27. 2013 2011 2012 2014 2015 2016 2018 Global Average 2017
- 28. 78% Green Stars
- 30. North America Sector Leaders
- 31. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
Editor's Notes
- Welcome and congratulations on another year of improved performance. 64 countries Topped 900 entities that submitted in 2019 79 000 assets 49,000 reported at the asset level everyone’s had a chance to check their individual results Tonight we are going to learn how the industry as a whole performed
- Welcome and congratulations on another year of improved performance. 64 countries Topped 900 entities that submitted in 2019 79 000 assets We kept you on the edge of the seat for a little longer than expected this year, but our extensive set of test took a bit longer than expected] everyone’s had a chance to check their individual results Tonight’s goal is to learn how the industry as a whole performed, and gain insight into
- Five year track record of imprvoed performance Congratulations to everyone for contributing to this.
- The 2018 Global Average = 68 third quintile MP = 76.6 IM = 64.3
- top corner – place where everyone wants to be represents 78% of the benchmark (i.e. 78% entities are Green Stars). ESG conversation has shifted from WHY to HOW? 78% real estate portfolios who‘ve submitted data seem to know what proper ESG programs look like for their organizations what‘s more important, they‘ve developed a pathway to implementation
- GRES uses a force ranking system for 1-5 stars
- The performance gap between Listed and Private is narrowing Listed is still in the lead Culture of transparency Create management systems focused on a single entity vs a fund manager who has multiple funds
- It‘s not news that Australia continues to lead the regional comparison, Europe slips behind. North America is a strong #2
- Canada has 20 in the 2018 benchmark pool US has over 200
- The real estate market adapts faster to ESG improves performance at a higher pace. As the GRESB benchmark pool grew from 200 in 2010 to 900+ in 2018, the sophistication of new entries also increased. For three years running, 1st year participants enter the benchmark above 50: 2018 = 55.85 / 100 2017 = 52 the industry is becoming self aware. Getting “GRESB Ready” is a thing The average score of the 42 entities who have been consistently reporting for 9 years is 80.03. Raise your hand if you’ve been doing this for 9 years One in two are 5 stars 55% of these companies made their way to the top of the benchmark and are now 5*rated entities. 31% of this group are Retail entities 26% of this group are Office entities 55% are European
- Everyone‘s doing great on the existing “test“ impressive to see that top corner so crowded I pointed this out last year, and yall went and got even more crowded in that quadrant. begs the question: WHAT NEXT?
- North America reprsents 50% of the AUM reported 75 of the top 100 IPE private equity firms particiapte 75 of the top 100 listed companies globally .: GRESB Market penetration of the institional real estate sector is ~50% Conundrum..... Pathway for new particiapnts Calling out / differentiating Performance for the veterans
- In the meantime, we‘re organically increasing coverage in both listed and non-listed sectors and have obtained critical mass to have a well rounded conversation about ……
- ……Sustainable Real Assets – three words we‘ve given a lot of thought lately. What is sustainable today? What is sustainable in the futute? What shoudl sustainable mean, so that we meet our collective targets?
- WorldGBC developed the Net Zero Carbon Buildings Commitment, which aims to maximise the chances of limiting global warming to below 1.5 degrees by drastically reducing operating emissions from buildings. The Commitment will be officially launched at the Global Climate Action Summit (GCAS) in San Francisco, United States of America (12-14 September 2018).
- GRESB stands behind this initiative and appreciates the commitment. Observation Energy is one element among many GRESB believes that a portfolio of buildings has work to do beyond enegy – water / waste / stakeholder engagement / resiliance / healthy An important step forward is to make assessments based on the quality of managemetn actions and processes ......based on Reliable data. Focal point of GRESB‘s work over the next years, we need your help
- The results from the third and final year of the voluntary health & well-being module confirm that health considerations are becoming standard components in the sustainability strategies of leading managers. These results are not only coming from Australia -- we see strong evidence from all regions. 297 entities filled out the voluntarily module in 2018 11 obtained a perfect score. More than half (52%) are leading in both internal and external practices As from 2019 onward, the GRESB Real Estate Assessment will incorporate the most relevant indicators, thereby making responses mandatory for participants.
- 2018 was the inaugural year for the Resilience module, developed in response to organizations that are building a capacity to assess, manage and adapt in the face of social and environmental shocks and stressors The Resilience Module included eight broad indicators related to governance, risk management, business strategy, and performance measurement. 90% of participants have a senior employee responsible for resilience more than 80% report specific actions to promote resilience. Chris Pyke is here with us today – instrumetnal in developing this module Stay tuned in for arrticles and insgihts coming from these reuslts on our website + major publicatons Resiliance is the primary theme in the next edition of IREI ESG Means Business
- UN Sustianable Development Goals - we‘re going to talk abou those in the panel SDG7.3: global energy efficiency has to improve by a 2.6% compounded rate between 2010 and 2030. Based on the data we collect, we can draw conclusions not only on the performance of individual assets and portfolios,but also about the aggregate performance against other goals We did this exercise last year, when we realised that the GRESB universe is well on track to meet the SDG7.3 energy improvement target by 2030. Industry continues to stay on track The GRESB Universe target is -2.74%, which is below the required 2.6%. Concern: 29% of the benchamrk does not have any target whatsoever.
- Concern: 29% of the benchamrk does not have any target whatsoever.
- SDG 13: GHG emissions in 2050 must be 40-70% lower than 2010 levels. Based on our calculations, the long term greenhouse gas emission reduction targets set by GRESB participants are generally in line with the more ambitious SDG13 requirement to reduce overall emissions by 70% by 2050. Concern The intention is there -- not yet completely visible in performance GRESB received 2018 submissions from only 2 net zero portfolios use a combination of renewable energy and carbon offsets.
- To recap – we agree that we want healthy buildings and we know we want them to be resilient,…. Efffecient is difficult to measure, and multi-dimensional buildings to be occupied Messy varialbes called ‚humans‘ show up to work / live / play in them, and run them In order to define the boundaries of „efficient“, the indsutry needs the right type of data. The 2018 GRESB databse includes more than 79 000 assets Just shy of 50 000 were reported using asset level tools that include consumption data.
- Breakdown by sector
- We now have critical mass to be able to provide you with insights at property type level, within your own region 2018 Office assets = ~13,000
- And even within your country, so that you can make informed decisions of what constitutes an efficient asset. This is GRESB’s focus in the coming period. Apart from being an effective reporting tool to investors, we seek better ways to empower the benchmark and provide market intelligence tool to each of you
- …..and we want to wotk with you on that, because we have a shared vision Talk about the engagement timeline and process for getting their feedack in the upcoming months.
- The 2018 Global Average = 68 third quintile MP = 76.6 IM = 64.3
- top corner – place where everyone wants to be represents 78% of the benchmark (i.e. 78% entities are Green Stars). ESG conversation has shifted from WHY to HOW? 78% real estate portfolios who‘ve submitted data seem to know what proper ESG programs look like for their organizations what‘s more important, they‘ve developed a pathway to implementation
- Questions?